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Critical Market Stats You Must Know as a Broker

Oct 23, 2014

As the commercial real estate market enjoys a resurgence across the country, brokers must stay abreast of vital current marketplace statistics to be effective with buyers, sellers, lessors, and lessees. These commercial market stats help brokers offer more value-added services to their clients.

 Commercial real estate brokers depend on the value and integrity of their brand even more than those in other industries. Whether selling or leasing commercial space, brokers must be knowledgeable about their market area data and trends. Their success depends on their familiarity of critical market statistics and trends in their area.

 National and Local Market Data You Must Know

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  • Vacancy rates around the country and in your market area are critical information. For example, vacancy rates have been declining for most commercial property types across the US since around 2009, except for the South Atlantic region, which actually had a vacancy rate uptick until 2014.

  • Supply and absorption rates are equally important, particularly for sellers and lessors. Supply and demand rules still apply, as they have forever , but market stats experts estimate expected absorption rates for different areas, which may limit or expand your market success opportunities.

  • Current inventory of properties your buyers prefer is a necessary stat you need at your fingertip. While your area’s inventory of available properties is a constant buyer/lessee concern, sellers and lessors also need this information. As inventory (supply) increases, prices typically decline even with modest demand. Prices will increase if inventory decreases buyer choices.

  • Rental and sales per square foot costs is a critical state for both buyers, renters, and sellers. Rental costs and sales prices per square foot have increased consistently since around 2011 in every US region. However, when the supply catches up with the demand, brokers will witness a “flattening out” of price increases--potentially even notable price declines.

  • Know the current vital statistics for the above categories for different commercial property types, including apartment, office, retail, manufacturing, warehouse and multi-purpose properties. Brokers that specialize in certain property types must know current market data for their specialities. Brokers that generalize must have access to current area stats for multiple property types. In all cases, top commercial brokers must be able to quote these stats to clients, many of whom will want to know these vital statistics.

  • Financing costs are critical stats for buyers. Brokers must be aware of the most active commercial lenders, along with their current interest rates and terms. This information is vital to the value brokers deliver to clients, as available attractive financing makes the difference between a sale and a buyer that keeps searching--often with other brokers--who may find the property and financing your now-former clients wants.

The thriving commercial real estate market offers many new opportunities for buyers, sellers, and brokers. However, as always, success is not automatic or even on cruise control. Success depends on broker knowledge and attention to detail, keeping the client’s interests as the prime focus. All parties, particularly brokers must do their homework. Brokers must research available properties and stay current with all critical market statistics, and be able to quote them instantly and accurately.

 

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Topics: Best Practices

The Apto Team

Written by The Apto Team

Apto, the commercial real estate software company, is the #1 CRM and deal management platform for commercial real estate brokers, with more paid users than any other service. Apto was built by and for brokers to help them manage contacts, properties, listings and deals from anywhere, on any device. Apto customers include thousands of independent brokers around the world, as well as multinational brokerages CBRE, JLL, NKF, Cushman & Wakefield and others. Headquartered in Denver, Apto is one of the fastest-growing private companies in the U.S., as ranked by Inc. magazine three years in a row.

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