One of the advantages of being northern Nevada’s longest-running boutique industrial real estate market is our extensive in-house database. It’s a useful way of monitoring, tracking and forecasting what’s happening with industrial properties in our area, and it’s critical for our clients and prospective clients too. So what’s the big deal with industrial and commercial real estate data? Let’s take a closer look.
Commercial real estate market data comes in various forms and degrees of complexity:
• At its foundation are statistics such as market size, submarket size, vacancy rates, absorption rates, etc. • The next group pertains to transactional records such as lease and sale data. • The last group represents the all-important interpreting, trending and forecasting data.
It’s true that accessing market data is someone almost anyone can do – statistical measurements are available at no cost from county agencies, and market data can be found online to anyone with access to certain websites – but simply having access isn’t enough. Because once you have this data, the question becomes, how accurate is it?
If the information is garnered from public sources, it’s likely not in a useful format and it’s certainly not “scrubbed.” Scrubbing data is the tedious process of filtering out all the data that will produce a false statistic. These include investment sales; what appear to be sales but are only ownership entity name changes; properties that appear vacant but are still unavailable for lease; occupied locations that are available; duplicated records; and missing records. All these and many more factors make public data very suspect. Truthfully, obtaining accurate, proper market data is not easy. So how is the average person supposed to get it? You just have to ask.
Proper, accurate market data come through the local commercial agency that commits the manpower, hours and other extensive resources to generate it from scratch. It’s a complicated endeavor that begins with initially generating the property market size through literally counting every industrial location in each submarket sector. This is a monumental task in itself. To stay current, it must be updated constantly – adding new buildings and deducting any buildings deemed completely obsolete or repositioned as another type of real estate product. Then the firm must establish, track and routinely update the locations that are vacant and those occupied by the tenants or owners who would move out if they found a new occupant. All of this generates the vacancies. The next step is tracking all locations that were brought back into the market. All of these variables impact the vacancy and absorption statistics.
Sound daunting? It should. Because it is, even more so than most anticipate. To make this data useful not only now but in the future, we look at trending. Trending requires historical data to review trends over time, which are the all-important factors for aiding any real estate decision. The more accurate and comprehensive your data, the better positioned you are to make choices based on that information. It’s why the catchphrase on our Market Advisor – a quarterly market update on northern Nevada complete with statistics, transactional data and forecasts – is “Accurate Data – Better Decisions.”
Here’s the bottom line on market data, in our market and every other market – it’s a critical factor in the decision making process and one that in many cases is based on foundational data that is downright inaccurate. It’s always best to gather market data from firms that have a solid reputation and from agents with a long-standing experience in the type of real estate you’re considering.