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Training > Applied Real Estate Market Analysis

“Bad news sells newspapers. It also sells market research.”
Byron Sharp
Australian academic

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APPLIED REAL ESTATE MARKET ANALYSIS
Mine the market for hidden opportunities

In today’s market, relying on untimely or incomplete data to make real estate investment decisions can have catastrophic consequences. Market data is hard and expensive to get—and especially so in developing countries.

And yet, with all the uncertainty surrounding the quality of data used to perform feasibility studies and valuations, analysts never fail to report IRRs and ROEs to two decimal points—giving a false illusion of high precision.

You probably have heard the expression GIGO—Garbage in, Garbage out. The point is, an IRR or

PROGRAM OVERVIEW

HOW YOU WILL BENEFIT

The raison d’être of this course is to provide you with the knowledge, skills and tools needed to carry out market analysis for different property types—including office, retail, residential, industrial and hotels.

Upon returning to work, you’ll be able to:

  • Use the fundamental principles of urban economics as they relate to property investment analysis.

  • Apply the concepts of supply and demand to real estate markets.

  • Use the economic base analysis to forecast employment and population.

  • Identify the different types of consumer surveys, their advantages and their limitations in providing insights about customers.

Real estate market analysis is important to anyone involved in property including:

  • Developers who need to estimate the amount of space—of a particular product type—that the market can absorb at a certain location.
  • Investors who want to be sure that they are not overpaying when acquiring property and that expected returns are commensurate with taken risks.
  • Lenders who need to assess the viability of an investment before committing funds to the project.
  • Brokers who need sound market intelligence to be credible with their clients.

WHO SHOULD ATTEND

Day 1 & 2 - Concepts and techniques of real estate market analysis

PROGRAM CONTENT

TRAINING CERTIFICATE

By the end of the training, you’ll sit through a 1-hour open-book written exam. The exam will consist of multiple-choice questions and is based on material and concepts covered during the course. Upon successful completion of the training assessment and satisfactory attendance of the course, simplexCT will provide feedback on your performance and award you a certificate of successful completion of the training.

COURSE PREREQUISITE

The course includes extensive use of Excel to work through the problems and case studies. Hence, it’s imperative that you have a working knowledge of Excel before attending in order to maximize your learning experience.

CASE STUDY

The course concludes with a real world case that requires you to apply the course’s concepts and tools to build a complex supply-demand model for a variety of real estate product types using Excel. You’ll explore important questions and find answers as to what to build and how much to build considering the governing market conditions.

Day 3 & 4 - Application of market analysis to real estate product types

- Market and competitive analysis
- Location, design and site analysis
- Political and legal analysis
- Financial analysis

General features of real estate market analysis

Real estate economics

Urban economics

• The real estate strategic analysis model

• Real estate space and asset markets
• The role of the development industry
• The real estate system
• Supply, demand and rent in the space market
• The reason why supply is “kinked”
• The 4-Quadrant model and real estate cycles

• The system of cities
• Central place theory
• Metropolitan growth patterns
• Economic base analysis
• Shift-share analysis
• Site analysis

Real estate consumer research

Real estate data

• Project design: asking the right questions
• Sampling design: asking the right people
• Questionnaire design: asking questions the
right way
• Data collection: obtaining answers to
questions
• Data analysis: designing analysis based on
study goals
• Reporting of results: communicating results
effectively
• Market analysis and statistics
• Measures of central tendency: mean,
median and mode
• Measures of dispersion: range and standard
deviation
• How to lie with statistics

• Market data, financial data and property data
• Interpreting market data
• Demographic data
• Economic data
• Psychographic data
• Supply variables and indicators
• Vacancy rates
• Absorption rates
• Rents and sales prices
• Cap rates and GRM

Industrial

Residential

Office

• Trade area analysis
• Linkages and location factors
• Competitive set analysis
• Framework for residential demand, supply       and gap analysis
• Planning and design issues

Retail

applied-real-estate-market-analysis

• Purpose of real estate market analysis
• Users of real estate market analysis
• Fit within the real estate strategic analysis
model

• Trade area analysis
• Linkages and location factors
• Competitive set analysis
• Framework for office demand, supply and
gap analysis
• Planning and design issues

• Trade area analysis
• Linkages and location factors
• Competitive set analysis
• Framework for retail demand, supply and
 gap analysis
• Planning and design issues

• Trade area analysis
• Linkages and location factors
• Competitive set analysis
• Framework for industrial demand, supply and gap analysis
• Planning and design issues

Hotel

• Trade area analysis
• Linkages and location factors
• Competitive set analysis
• Framework for hotel demand, supply and
 gap analysis
• Planning and design issues

NPV result from the most sophisticated financial model can be no better than the quality of the assumptions that go into the model—rents, sale prices, vacancy rates, absorption rates, cap rates, etc.

To this effect, we designed the course to bridge the gap between the theory of real estate market analysis and the need for managers to extract useful decision-making information from data collections. The course aims to make you aware of what your real estate investment decisions are resting on so you don’t fall into the GIGO trap.

  • Calculate the sample size and define the characteristics of the people who should be asked to participate in the study.

  • Identify and research the key elements, variables and major data types needed to conduct market analysis.

  • Delineate trade areas for different property types and estimate key measures such as potential retail sales or households income.

  • Use the Graaskamp strategic analysis model to quantify supply, demand and the resulting gap between the two.

  • Use best practices for designing and planning different property types.

  • Users who want to secure space at the lowest possible leasing cost.
  • Public officials who must ensure that future developments serve the public needs.
  • Designers who should understand the target market for a development so that the project features and amenities meet the target market’s needs and tastes.
  • Property managers who must track market trends to reposition their assets.