Real Estate Principles The Real Estate Market

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Real Estate Principles The Real Estate Market

• A brokers perspective
• Karen Hudson Jim Chynoweth

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Real Estate Market Fundamentals

• How do we analyze the market
• Define the market vs submarket
• Demand for space
• Supply of space
• External economic factors

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Demand For Space

• Who is in the market?
• Who is looking at the market?
• Who should be looking at the market?
• Employment Statistics
• Demographic Statistics

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• Pie chart of Albuquerque employment by sector vs.
  national employment by sector

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RETAIL EMPLOYMENT Retail trade and leisure
hospitality employment are primary determinants
of demand. Leisure hospitality includes eating
and drinking establishments as well as hotels and
other travel related facilities. Over the last
five years, Albuquerques retail trade
employment has increased by 6 while leisure
hospitality has grown by 10.3. Over the last 12
months, retail trade and leisure hospitality
employment has grown by 2.3 and 2.6,
respectively.
RETAIL EMPLOYMENT GROWTH vs. TOTAL EMPLOYMENT
GROWTH
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Supply of space

• Inventory of space in the market
• What is vacant?
• Vacant Space/ Total Space Vacancy Rate
• What are the rental rates?
• Annual Rent / Rentable Space Rental Rate
• How much new space is coming on the market?
• What is the absorption of space?
• EOY Occupied SF BOY Occupied SF Annual
  Absorption

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• CBRE office statistics table

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External Economic Factors

• Government Actions
• Inflation
• Stock Market
• National Economy
• Local Economy

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Who do you go to for this information?

• Your broker
• UNM Bureau of Business and Economic Research
• Albuquerque Economic Development
• U.S. Census Bureau
• Web based demographic companies

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Why Brokers?

• Brokers job is to provide information to the
  parties to a transaction.
• Listing Agent
• Tenant/Buyer Representative

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Listing Agent

• Master of information on the building
• Physical attributes of property
• Competing property
• Advantages/disadvantages of property
• Anticipate questions a user needs to know
• Negotiate terms of a deal on behalf of owner

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Tenant Representative

• Master of the Market
• Educate client on market conditions
• Identify available options
• Analyze available options
• Negotiate terms of a deal on behalf of user

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How is it done?

• Networking
• CARNM
• LoopNet
• SIOR
• CCIM