Instructions Select one asset (building) to analyze in all three parts of this project. It is best to choose a building that you're able to observe, and even better if you're able to obtain a tour, or access to the "back of house." This project document, along with the tools, are where you will gather and analyze data. After you reflect on what you have learned in each step, you will copy and paste specified portions from the project part into the Leasing Strategy Template.

Although you will submit the project once all three parts have been completed, please feel free to ask your instructor for guidance along the way. You will be required to turn in:

In Part One you will perform a market assessment for your subject asset, exploring the ways in which supply and demand, along with the competition within the market may influence your positioning strategy, and your short and long-terms goals.

In Part Two you will focus on a common and practical element of most commercial leases, the common area maintenance options. You will reflect on what you have learned about the different types of lease strategies and the negotiating impact of common area maintenance fees within a lease structure.

In Part Three you will evaluate the competition within your selected market and suggest ways to optimize the position of the subject asset. You will also examine the impact this has on managing the cycle of tenancy.

Use this document and the Leasing Strategy Template to record all your project work and responses to any questions. At a minimum, you will need to turn in a digital copy of this document to your instructor as part of your project completion. Your instructor will provide feedback to help you work through your findings.

Instructions To develop a leasing strategy, you must have a deep understanding of not only the asset, but also the market in which that asset exists. Complete the sections below to begin collecting leasing strategy information. Reflect on how you would present the data and analysis to key stakeholders in the leasing department and/ or asset management company.

as instructed in this project (and indicated by the icon on the left) copy pertinent data and analysis points, and paste them into the Leasing strategy Template. This project document will be where your thoughts are explored, and the Leasing Strategy Template is the refined presentation of this data and analysis. You will replace the placeholders and blue text instructional text in the Leasing strategy Template.

Asset Overview Provide the basic descriptive information for the subject asset.

Building Name:
Address:
Owner:
Square Feet/Meters in Building:
Age of Building:
Number of Units for Lease:
Average Square Feet/Meters per Space:
Average Length of Lease:
Building Management Company (if applicable):

Products and Services (Review/ Inventory) for Your Subject Asset

Access the "Products and Services Assessment.xlsx" tool and review the data collected from the Products and Services Activity. At this point you are only looking at data for your subject building; you will later use this same tool to examine the competition.

Summary:

Market Assessment

A market assessment is a detailed and objective evaluation of the potential of the quantitative and qualitative factors for a business product or service. It is a comprehensive analysis of geographic factors, market scale, target market, trends, competition, barriers to entry, and risks and regulations, that help a business determine opportunities and strategic direction. All of these factors apply to a market assessment for commercial leasing.

There are two general approaches taken. The first examines the macro trends of the market as well as the micro trends of specific buildings within the competitive market. The second approach (taken for this project part) focuses on the building's competitive market with a select amount of overall market data.

Instructions

Use your subject property to complete the brief market research activity below, as it pertains to your chosen real estate asset sector/class, and location within the market.

Much of this information is publicly available on the internet, or through City Hall, Census Bureau, the local Chamber of Commerce, commercial real estate brokers or the local commercial real estate association.

For the purposes of this course, perform your market assessment using a focused view of the buildings competitive market with a select amount of overall market data.

Areas of Analysis

Conduct the Market Assessment by entering observations about your subject property to each of the areas below.

Geographic Factors

Geographic factors can be one of the most important considerations when evaluating a leasing market. Location is often the number one factor for a client when searching for leasing space, whether it is office, retail, restaurant, or residential use. Therefore, understanding the immediate geographic market landscape is critical for your market assessment. It is important to measure the size of your market (in blocks, kilograms, or miles). That defined area may then be used to determine your competition, target market, regulatory factors and more.

Describe each of the following factors as they pertain to your subject building:

Geographic information (size of market area and proximity to other competing business

Demographics (area population, average household income, and occupational concentrations). It is easy to pull a lot of demographic information for a market, but much of it would not be used in your leasing strategy, so be cautious not to overload the analysis with unnecessary data.

Describe the daytime population, versus evening traffic, especially if there are restaurants or evening entertainment options included in your building.

List and describe municipal infrastructure (public transportation, airport service, public services infrastructure)

Describe trend information (overall construction development growth, job growth, labor force issues, new businesses entering or leaving the market)

List and describe any destination attractions (historic landmark, large retail establishment, museum, other entertainment offerings)

List and describe area residential lifestyle factors, which may correlate with age (food choices, entertainment, convenience of services, discretionary income)

Market Scale Determining your leasing market scale is basically identifying the size of your potential leasee market. Scale may be measured by dollar volume of the potential market, number of potential clients, or in the case of real estate, existing square footage/square meters. Choose whichever method suits the particular business, however look to use consistent metrics when comparing market factors. In some cases, using several methods to quantify the size of a market is useful, especially if new development is under consideration.

Describe the market scale as it pertains to your subject building:

Market Trends

Trends within the subject building's real estate sector that may influence the market. These could include overall business climate, telecommuting, housing trends, neighborhood ancillary services (restaurants, banks, retail services), expected building amenities (fitness centers, communal areas, parking), traffic volume, crime rates, quality of secondary education.

Describe the market trends as they pertain to your subject building:

Barriers to Market Entry

Identify how difficult it is for a new business to enter the competitive market. Barriers to entry include available land, availability of capital, interest rates, taxes, cost of construction, permitting procedures.

Describe the barriers to market entry as they pertain to your subject building:

Risks and Regulations

Identify any risk or regulatory factors that may influence the market such as; general market cycles, market stability, new code changes, building replacement cost, labor issues, terrorism threats, municipal infrastructure reliability, etc.:

Part Two

Evaluate Common Area Maintenance