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CRE Broker or Information Analyst

What is the role of a commercial real estate broker today?  What is the most important task that we do for our clients? Is it analyzing the market data?  By definition (via Wisegeek) an information data analyst is:

A data analyst is a highly trained individual that specializes in collecting, organizing, and analyzing data from various resources. For example, the data may be obtained from secondary source documents such as statistical studies, or from direct consumer marketing surveys. In terms of analysis, the data analyst generally uses data management and reporting systems to collect and organize specific data drawn from relational databases. While this process is largely automated, it must first be initiated by developing mathematical computations and collection protocols in order to extract and extrapolate data into meaningful statistical analysis or “what if” scenarios. Four basic tasks are:

1. Data cleaning

2. Initial data analysis (assessment of data quality)

3. Main data analysis (answer the original research question)

4. Final data analysis (necessary additional analyses and report)

Sounds a lot like what I do every day for my clients.

Here is my problem.

Commercial real estate data is now a commodity.  Everyone has it and everyone has access to it.  Brokers, Developers, Banks, Receivers, Clients, etc. I know that I have made this statement before but, most of it really sucks.  If it’s all out there for everyone then, what do they really need you for?

Points of Reference for Today’s Broker.

Your only advantage is your knowledge of your local market.

Clients will now find you after they find the building they want to occupy.

Specs of the building are relevant but only to compare and shop the space.

Your communication with that client will be a huge key.

Your expertise is the only thing of value to your potential client.

It is now more important than ever that you get quality data, but how and from where?

What if the consumer or client is better at analyzing the data than you are?  Is there a need for your service at all?

A little help.

Dominate your area by giving out true and accurate data.  Interact with more than just your 5 to 10 person firm.  Research and help define the market.

Let everyone search and get as much information about your and everyone’s available properties.  They are going to find it anyway.  Be THE source.

Create an online environment for your local market that can be researched, sourced, and interacted with. You might be surprised.

Your role needs to change.

Be the provider of true and accurate data in your market.  Be the source for commercial real estate information.  Give it away and don’t pay to get it back. Interact and converse with other brokers, bankers, affiliates, clients.  Information analyst = commercial real estate broker maybe still.  But maybe, not for long.   Are you going to let the market define you or are you going to define the market?

Photo via Flickr:http://www.flickr.com/photos/jamesjustin/

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  • There is a huge disparity between knowing the data, and understanding it. The information highway is free and cluttered, and of course, we rely on a broker to be not only our GPS, if you will, so we don’t roam the roads aimlessly, but our AAA TripTick with all of the rest stops, restaurants, attractions and such, the we specifically want to see, highlighted in yellow and clearly detailed with a red sharpie.

    So while having a listing and amassing data may make you ‘A’ broker, knowing how that data relates to us, will make you ‘OUR’ broker.

  • Nadina Cole-Potter

    I call myself the “research queen.” The data I have found that matters to clients (and to me) is 1) as full a picture of all the aspects of a specific property as can be gathered from public records, principals, and 3rd-party sources; and 2) data about what is going on currently in my niche, my market , and the submarket of the property. My niche is multifamily properties 50+ units. My market is the greater Phoenix area. The submarket is wherever the property is located within the greater Phoenix area. I get better results when I go deep rather than wide.

    In regard to public information, we are blessed here in Maricopa County and Arizona because detailed public records are available on the internet, including on-screen and printable pdf versions of documents recorded with the County Recorder and the Corporation Commission. A great source for data on specific multifamily properties in a specific market is Pierce-Eislen (www.pi-ei.com). The data can then be combined, sliced and diced using Pierce-Eislen’s pre-fabricated reports or you can create your own reports. Another source is reis.com. However, I find reis.com a bit clunky when trying to drill down to information about a specific property. There is substantial market and submarket data available but it is a blizzard of verbiage, and, in my opinion, dies of its own weight and wordiness. One helpful tool is a report on planned and under-construction properties in each commercial category within a specific major market.
    Another 3rd party data aggregator is iMapp, a tool made available through our local MLS — and the only reason for a commercial broker to subscribe to the MLS in this area. iMapp has a vendor on the ground who provides same-day transaction information, including the filing of Notices of Trustee Sales — and results of those Trustee Sales on a 24-48 hour basis. So researching and updating sale comps on a timely basis is relatively easy.

    I spent about 2 years as an urban re-developer of small commercial properties. My research for clients is the same kind of research I would do for myself prior to investing my and other investors’ money in a project. Having been through the process of writing up a real estate private placement memorandum that meets the SEC’s requirements is good training for researching what investors want to know about a property prior to making an offer.

    The largest macro-data I am interested in is the general economic picture — on an ongoing basis– in this county and the state. The most important, to me, is potential employment growth (or shrinkage) and major business locations and relocations in the submarkets. We are blessed with a number of local and state public, educational, and private research resources, as well as a weekly business paper, pretty good business reporting in the daily newspaper, and more monthly business and real estate market-related publications than I can track. I am not sure what I would do if I had to keep way ahead of the curve selling and leasing industrial and office properties. But I count on the PR releases from those brokers and their clients announcing done deals because they let me know where the employee base will be growing and where the economic engine is revving up. All of which affect the health and future of multifamily investments.

    Anything bigger (national data, regional data, data from another state) is too amorphous to wrap my mind around — except as it affects the availability of capital. But most investors in multifamily are coming here with cash or privately issued debt.

  • Duke:

    I believe you have hit upon something here. I believe, however, that the value a CRE broker adds is his or her knowledge of the “players” in the market…the brokers, owners, etc. Matching a building with the requirement is sometimes the easy part. Matching the requirement with the right owner takes thorough knowledge of the market and not just the data points.

    Best,
    Allen

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  • HughWade

    Great post, Duke, and the responses by Nadina and Bob (below) were absolutely stellar. Hugh Wade in Anchorage.

  • CC Clarkson

    Try being an Architect when your rear is on the line. It ‘s one thing to obtain due diligence ,even more to ctreate it.