DISCIPLINE KNOWLEDGE
Market Analysis
Evaluate market analysis tools and techniques that underpin property development and investment feasibilities and establish the highest and best use of property assets
Before a developer moves forward with a project, they must complete market analysis. Analysis of the surrounding market will prove/disprove if there is an actual demand and need for the project idea. A developer will go over three different types of data when doing research: market, property, and financial. This research will be used to find the supply and demand for a property type, and gain the absorption and capture rates that can be used to back up the desired idea.
Market data will find the demographic, economic, and lifestyle of the desired market area. Property data is taking a closer look at the land you are looking at compared to the properties around it, and asking questions like the following. How will your project affect the surrounding area and vice versa? Does the property need to be rezoned and how difficult of a process is that? What are the legal details of the property, any existing liens or easements to deal with? Finally financial data is important because you and your potential investors want to know the financial feasibility of the potential project. This data will prove if the return on investment is worth moving forward with.
These are concepts that are mainly focused on in our Market Analysis class (LDEV 664) where I created projects like the one below. My group’s assignment was to use market analysis on a given parcel of land in College Station to determine the highest and best use that would gain the best possible return on investment.