What are the most effective strategies for finding comparable properties in a specific market?

The answer everyone hates... IT DEPENDS! The best and most common source is through brokers. Their job is to network and understand what things in your local area traded for, and will sometimes share information that aren't available online, along with intricacies of each deal - it's important to know the context! What about property platforms like CoStar or Crexi? Some can be quite expensive, so it doesn't make sense to get a subscription if your deal flow isn't sufficient to justify it. For certain other markets, there just aren't many comps - either due to a lack of similar inventory or a lack of transaction. In this case, consider other valuation methods such as the income method or the replacement method.

Talk to your title rep or call me. I help clients with CRE comps in markets all across the US. A good title rep has access to numerous proprietary sources of data that can help you hone in on the most accurate comparables which will help you advise your clients in the best way possible.

Costar is the best source for lease and sale comps. I saw someone mentioned Loopnet, but Loopnet does not have comps, only Costar has comps.

4 ways to choose the BEST possible comps: 1. Proximity: Look for comparable properties in the same neighborhood or nearby, as location impacts property value. 2. Similar Features: Find comps with similar square footage, number of bedrooms and bathrooms, and other key features. 3. Property Type: Ensure the comps match the type of property you're interested in, whether it's a single-family home, condo, or multi-unit building. 4. Age: Use properties that were built +- within 5 years as the subject property. By meticulously selecting comps that align with these criteria, you'll make more accurate assessments about your projections. Your investors will thank you!

In the hotel space specifically, if you have contacts at the major hotel brands or hotel management companies they will always have the market data that you need . You just have to have the contacts so you can pick up the phone and call them. If you don’t have a one-to-one contact start digging and you will find one somewhere on social media. Usually they are happy to help.

As a multi-tenant building owner, I understand the importance of gathering information on comparable properties for lease. Online platforms such as LoopNet and CREXi are invaluable resources. These platforms can easily help you gauge your market. However, speaking with commercial real estate brokers, and fellow building owners is a vital step in gathering information. These sources can provide additional valuable insights and details. It is important to note that while brokers are a valuable resource, their primary goal is to close deals. As such, their information may not always be entirely unbiased. It is essential to verify any information received from brokers through additional research and cross-checking with other sources.

While using comps from multiple sources is a good practice, the best comps are almost always going to be local. My first source is going to be the local CIE (Commercial Information Exchange). If there are not enough comps, I will generally try to look at PVA data. It is an iterative process. I will do a first pass and evaluate the results, then adjust as needed to try to get a better estimate. Also, my opinion is that you need to look at both the properties which have sold or leased as well as what it currently listed to get a complete picture.

What you find online is usually just a sample of what is really available. Find the broker who know the market you are considering best. Ask a few questions; How long have you been working in this area? How many years have you spent in the industry? Do you make use of tech to optimise how you track the market? Please share your track record are just a few off the top of my head.

To enhance your property valuation strategy, leverage diverse data sources. Initiate your search with online platforms like CoStar, LoopNet, CREXi, and Reonomy, specializing in commercial real estate data. These platforms offer extensive listings, sales, lease data, and valuable market analysis. To ensure a well-rounded understanding, complement online research with insights from brokers, appraisers, property owners, tenants, and local authorities. This multifaceted approach ensures a comprehensive and accurate assessment.

Staying on top of the latest technology can be challenging in the senior living industry, which is known for slow adoption rates. However, basic tools like NICMap data and Google Maps can provide helpful insight when researching senior housing options. Cross-referencing NICMap's market data with Google Maps allows you to validate and compare potential senior living communities. But technology can only take you so far. It's still essential to tour communities in person before making a final decision. On-site visits help you look beyond the numbers to assess important factors like maintenance, aesthetics, and company culture. A property can look great on paper but feel outdated or unwelcoming when experienced firsthand.

Adjust for disparities between your subject lease property and the comps, as each property has different factors affecting its lease rate. Consider the space buildout time for each prospective property you want to lease, property condition and quality, lease terms, incentives, buildout costs, and market fluctuations during evaluation. Interview other tenants on the properties to verify that the property management team does a great job at taking care of their tenants and maintains the property well. Remember to compare crime statistics in the property's location to ensure your employees will be safe.

To determine the true value of your property, it's crucial to consider variations between it and comparable properties. Differences like sale/lease timing, property condition, lease terms, financing, and market fluctuations impact value. Adjusting for these disparities is key, employing methods like sales comparisons, income capitalization, or cost approach. Accurate adjustments ensure a reliable valuation.

Adjusting for differences is crucial to get an accurate value. For example, I once had a duplex to sell that was a bit older than others on the market. While the comps gave me a starting point, I made adjustments for the duplex's age, the fact that it had long-term tenants in place, and its recent roof update. This helped me set a competitive price that reflected its true market value, despite not being a like-for-like match with newer properties.

One time at work, comparing properties posed a challenge due to differences, prompting the need to adjust for variations. In my experience, adjusting for factors like size, condition, and amenities ensures a more accurate valuation of comparable properties. One thing I have found helpful is employing a systematic approach to quantify and standardize adjustments, providing a fair and realistic basis for property comparisons in the market.

When using adjusted values, the adjustments are applied to the comps, not the subject. While that may seem obvious, it also seems to frequently cause confusion when presenting comps or a price analysis to customers.

The fourth strategy involves a thorough analysis of your comparative property search and adjustments. Examine the price and term ranges, spotting outliers that could distort your findings. Compare average and median values with your subject property. Utilize tools like charts, graphs, and tables to gain insights. The aim is to identify representative comps that accurately reflect the current market value and your subject property's performance.

My feeling is that the analysis needs to consider more than just comps. Consider that an appraiser will look at a property in several ways - the amount it cost to build it historically, the cost it would take to completely replace it, market sales and leasing information (comps) and the value of the income it could generate. Ideally, these should all come to a similar result. If they do not, you need to review your assessment and make sure it makes sense.

The key is in the details, especially if the comp prices vary widely. It is difficult to compare CRE comps apples to apples because buyers may value certain features and amenities differently. Investors are concerned with cap rates and tenant quality, whereas an owner-user is concerned whether the property is a good fit for the business. Using comps to determine value should only be a starting point. Value is subjective depending on the objective - investment or owner-use, etc.

Analyzing comp results is like piecing together a real estate puzzle. For example, when I had a listing for a three-bedroom condo, after collecting comps and adjusting for differences, I plotted the data on a graph. This visual aid quickly showed me that while most three-bedroom units sold around a certain price point, there were a few that sold for much more due to recent renovations. By excluding these outliers, I could better understand the true market value for my client's condo and set a price that was competitive yet realistic in the current market landscape.

One time at work, after gathering comparable property data, the crucial step was to analyze the results. In my experience, conducting a thorough analysis of key metrics such as price per square foot, days on market, and property features helps in understanding market trends. One thing I have found helpful is using statistical tools and trends to derive meaningful insights, facilitating informed decision-making in the real estate sector.

Comparing two properties would be easier than comparing two mindsets. Comps strategy is simple and specific, comparison is always based on market analysis, building conditions, location, size, quality, age, market trends and an expert appraiser/consultant/brokers views. But the opinions, preferences, choices and priorities are always different for each individual. This is what we call the Market Forces which decides real fate and comparison between the properties.

Keeping comps current is essential due to market fluctuations. In my practice, when representing a client with an office property, I didn't just look at comps once; I updated my data every few weeks. This was particularly important when a new business park opened up, altering the demand dynamics. By staying updated, I ensured my client's pricing reflected the most current market conditions, making their property competitive and in line with the latest market movements.

One time at work, I realized the importance of updating comparable property data regularly for accurate market analysis. In my experience, regularly refreshing data ensures that property comparisons remain relevant and reflective of current market conditions. One thing I have found helpful is setting a routine for data updates, incorporating new listings and sales promptly to maintain the accuracy of the analysis over time.

In my experience, updating comparable property data regularly is essential for maintaining accuracy in real estate valuation. Market conditions change, and recent sales can significantly impact property values. Regular updates, considering the latest transactions and market trends, ensure that property valuations remain reflective of the current real estate landscape.

Sometimes, there may be a legal or a financial reason that would alter the value of a property for you. One factor that often occurs is tax issues. This might be in your favor or it might be against your favor. A very common one would be a capital gains tax issue. A legal issue might be something as simple as licensure. If you are looking for an office and are licensed to practice in one state, a property in another state, even if it is physically next door, would have no value for you. Another very important issue is environmental issues. The liability for these can be extremely expensive. Inspections, Tax advice, Legal advice, and Financial advice are all important.

Strategy six involves seeking expert guidance in the commercial real estate sector. Analyzing property comparables can be complex and time-consuming, particularly in unfamiliar markets. Hiring a broker, appraiser, consultant, or analyst can streamline this process, offering valuable insights and accurate valuations. Consulting with legal and financial advisors is essential before making decisions based on these comparables. This professional input ensures well-informed choices in your real estate ventures.

In the senior living industry, partnering with a mystery shopping company can provide prompt and helpful insights into the resident experience at your communities. Connecting with local senior housing brokers is another way to gain valuable market intelligence.

One time at work, when faced with complex property valuation challenges, seeking professional advice became crucial. In my experience, consulting with real estate appraisers or industry experts provides valuable perspectives on refining comparable property assessments. One thing I have found helpful is acknowledging the expertise of professionals to enhance the accuracy and reliability of property valuations in the ever-changing real estate landscape.

In my experience, seeking professional advice from real estate appraisers or experienced real estate agents is crucial for obtaining expert insights. Professionals can provide nuanced perspectives on market conditions, valuation methodologies, and factors influencing property values. Collaborating with experts enhances the accuracy of property assessments and ensures well-informed decision-making in real estate transactions.

Engaging with professionals in the commercial real estate market is the sixth crucial strategy. Analyzing comps can be complex, especially in unfamiliar markets. Consider hiring a broker, appraiser, consultant, or analyst for expert guidance. They'll pinpoint relevant comps and offer accurate valuation estimates. Before any decisions, consult legal and financial advisors based on the comps' insights. This expert input ensures informed choices in your real estate endeavors.

Market Trends: Understanding if it's a buyer's or seller's market is key to adjusting your comparisons. Neighborhood Dynamics: Local development plans, school districts, and amenities can impact property values, so it’s essential to look at these closely. Seasonality: The time of year can affect property availability and pricing, which should be factored into your analysis. Listing vs. Closing Price: Listings provide a guide, but the actual closing prices are the true indicators of market value. Property Condition and Upgrades: These can significantly influence a property's value and should not be overlooked. Adding these to your toolkit will provide a more nuanced approach to valuing properties.

Nowadays I think it is important to consider ESG factors as well.Sustainability plays a very big role in determining values of properties whether rental or capital. In short similar buildings with different sustainability features will definitely have different values. After putting up a value on a property you stand aside and relook at the value whether it makes sense; can it stand scrutiny in the market; is it well reasoned (we talk of a well reasoned valuation more than an accurate valuation), this is Professional Judgement that will carry the day.