Data-driven business decision-making is transforming whole industries with unprecedented insight into opportunities and threats. But when it comes to gaining insight into leasing markets, many CRE professionals derive their transaction insights from traditional sources, which are based on asking rents, market-level trends and small samples of relevant deals. These data limitations can cost investors, lenders, and owners millions of dollars in suboptimal decision-making. This three-part report establishes that real estate professionals can significantly improve their bottom lines using accurate, granular deal level data.
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Go to Part Three
Download the full report.
Part One: Asset-Specific Assumptions Are Better than General Assumptions#
Brokerage reports on leasing trends generally profile whole markets and submarkets; however, in order to mark a single lease to market or an entire property’s rental performance, CRE professionals need to look to a property’s individual direct competitors. Without very granular data to accompany broad overviews, averages can mask wide variance in rents within a submarket.
For example, the average starting rent for office deals signed between June 1, 2014 and June 11, 2015 in the Grand Central submarket of Manhattan was $58.21. That figure, however, obscures the fact that over the same period, there was a large amount of variance among different segments of the submarket, such as:
- Leases signed in Class A buildings for 50,000 SQFT or more averaged $64.83 PSF in starting rent.
- Leases signed in pre-war Class B buildings had an average starting rent of $53.89 PSF
- Leases for spaces from the 10th floor and higher had an average starting rent of $63.03 PSF.
- Subleases averaged only $45.54 PSF in starting rent.
- The difference can be even greater when a single set of competitive properties is evaluated.
ASSET-SPECIFIC INSIGHT COMPARED TO BROAD SUBMARKET INSIGHT##
Subject Property: 19 West 44th Street####
In this case, the goal was to compare recent office transactions throughout the submarket to recent transactions at properties that are similarly sized, similarly aged, and located near the target property. This comparison revealed that starting rents at the competitive set of properties were 19% lower than starting rents in the submarket more generally over the same period.
Selected Property Competitive Set
Broad Submarket Vs. Asset Specific Market Data
Get Help from CompStak
CompStak’s Enterprise lease analysis platform puts comprehensive lease details at your fingertips, providing:
- Real-time deal data
- Impartial analyst-verified information
- Starting rents, concessions, transaction size, and more
- 200,000 lease comps and growing daily
- Up to 10 years of history
- 15 markets nationwide
- The ability to build competitive sets based on custom geographies, space type, transaction type, transaction size, starting rent, concessions, floor, building class, and more.
- Fully exportable data
To learn more about how CompStak can improve your decision-making, please visit CompStak Enterprise or call 646-926-6707 to request your free demonstration.