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Expert Analysis for Commercial Investments

Posted by Sharon Rosshirt on Monday, July 10th, 2017 at 3:02pm.

Technology Investment to Allow the Best Analysis

 In order to make ourselves more helpful to our friends and clients, the commercial team at Stanberry and Associates has invested heavily in several private databases and analytics programs that let us look into investments. There are lots of things we can analyze. Stanberry Commercial Realtors have the ability to look closely at market factors that might influence someone towards or away from a specific part of town. We also have the ability to do quick financial analysis on specific investments. We can also run financial investments which compare multiple potential investments. Let's take a closer look at some of the situations we might be able to help you with.

Financial Analysis

  • Cap Rate Analysis – Getting a realtor to do a cap rate analysis for you will let you know what your rate of return will be for your real estate investment. If you have your money sitting in a mutual fund or stocks it may be growing at a steady percentage rate. A cap rate analysis would let you know if it would grow more in any given real estate investment or if your money is better off where it is.
  • Cash on cash analysis – A cash on cash analysis will let you know how much of your cash down payment, you would be able to earn back within the first year. If getting immediate cash flow going after buying a business is important to you, this analysis would be something you would want to look at. Some people even look for a negative cash flow to offset their income, which could also be identified with this analysis. It helps to match the investor to the correct investment.
  • (IRR) Internal Rate of Return / (NPV) Net Present Value Analysis – This is a complicated analysis that essentially calculates the growth rate of an investment business against its current value if it sold today. Our agents have software to help analyze these numbers for our clients. While this analysis is hard to explain, one of the most common examples of how it is used is in comparing whether it is better to improve an existing facility or buy a new facility.
  • Lease vs own – This is a very practical analysis to see whether it is financially better for our clients to lease space/property or buy a property outright.
  • Comparative lease analysis – This would compare two different leases, combine as many factors as possible and find which was the better deal for our clients. Often in leases, this analysis is done on base rents, triple nets (NNN) which are property taxes, insurance, and maintenance of common areas. Our agents also take into consideration the electric, janitorial and other potentially hidden costs that sometimes go forgotten until they crop up later.

Market Analysis

While financial analysis looks very closely at specific investments. The market analysis looks at broader patterns and attempts to find ideal places to find a commercial venture. Here are some of the market analyses that Stanberry agents can perform.

  • Tapestry – The tapestry analysis allows us to create a gradient map showing saturation of business types in certain areas. It allows us to find places with less of a certain type of business where it would be better for our clients to locate. For example, if we had a client attempting to open a gym, getting it far enough away from the next closest gym would be very important. A tapestry analysis would help to identify low concentration zones that might support a new venture.
  • Demographics – Our databases allow us to pull up gradient maps to analyze demographic data when that is helpful for finding concentrations of your ideal clientele.  For example, finding the ideal place for your food truck park might involve finding a high concentration of your core clientele, millennials. Our databases would allow us to find a heat map of where they live to help with beginning a commercial real estate search.

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