Mastering the Commercial Real Estate Market Research: 10 Strategic Steps for Investors  

In the complex world of CRE, understanding the market you plan to invest in isn’t just advantageous — it’s essential. A thorough commercial real estate market research provides investors with critical insights into property demand, local economic conditions and regulations, as well as emerging trends. By evaluating factors like industry growth and competitive landscapes, investors can identify opportunities, reduce risks and make strategic decisions that maximize returns.   

This article explores 10 steps to help you do insightful and encompassing CRE market research.  

1. Assess the Local Economic Landscape   

There’s a reason why choosing the right location is the primary step in ensuring the success of your CRE investments. Before making any kind of decision, it’s crucial to understand the local economy in order to determine if investing in that area is bound to succeed. A thriving local economy often signals a higher demand for commercial properties, while declining markets could come with potential risks. All of this pairs with the area’s job growth, median income and population trends. Some of this information can be right at your fingertips, if you make it a habit to check the local news and outlets, as they usually cover significant changes in the local economic scene. Taking a close look into this market data can help drive a more informed and secure investment decision with significantly lower risks.   

2. Look into the Development Pipeline   

Investors can use commercial real estate market research to identify high-potential opportunities by uncovering details and trends on the local development pipeline. Platforms like CommercialEdge Research provide insights into upcoming projects, estimated completion dates, zoning details and ownership contacts. At the same time, media outlets can also provide useful insights into new or upcoming investments, transactions or partnerships between industry giants – which can, at times, determine the course of significant CRE properties and investments. For instance, media publications like Commercial Property Executive, Globest or The Real Deal often focus on relevant CRE news in an accurate and timely manner. By leveraging this type of data, investors can learn how to find construction projects and choose the ones that offer the best potential for growth and returns.   

3. Explore Local and Regional Emerging CRE Trends and Forecasts  

In such a dynamic market as commercial real estate, trends are bound to change and cycle, impacting the return on investments and profitability. This is why it’s vital to stay informed on current and emerging local trends that could affect demand for specific property types. By using a Research solution like CommercialEdge Research you can get a clear view of actual market conditions in your area of interest, including actual rents, lease spreads, occupancies and more. Moreover, you can enhance your investment strategy with local market snapshots featuring construction data, forecasts, completion schedules and trends – all of which will help you get a more clear-cut insight into the viability of your investment.  At the same time, relying on a monthly office report can provide you accurate and relevant insights into the dynamics of CRE, both from a national and a regional standpoint.  

4. Analyze Loan and Distress Information  

A thorough commercial real estate market research can also provide valuable insights into distressed properties that offer significant returns with the right approach despite their inherent uncertainties and risks. By leveraging a comprehensive CRE database, you can pinpoint the properties with upcoming loan maturities, as well as track their distress status. For instance, CommercialEdge Research allows users to find loan information and filter properties based on foreclosure status, while also providing an overview of CMBS loans at various stages. This information will help you identify investment opportunities and make strategic decisions on promising projects.  

5. Examine Sales Comps to Establish True Market Value  

By examining recent transactions of comparable properties – sales comps – investors can determine the fair market value of a property. This comparative market analysis unveils pricing trends, demand levels and market dynamics. Comps can also guide strategic investments by pointing out undervalued or high-growth opportunities. As a result, investors may negotiate better prices, find unexplored market niches and assess fair market values, as well as predict returns with accuracy by knowing the benchmarks for property valuation.   

6. Get in Touch with Decision Makers 

To make sure you are negotiating with decision-makers, it’s essential to identify the real owners of commercial real estate properties. Complex ownership arrangements or holding companies can frequently disguise property ownership.  While access to the right person expedites the negotiation process, finding true owners typically takes time and resources. However, a comprehensive and up-to-date CRE database, such as CommercialEdge Research, which provides true owners’ contact details, can make this process time-efficient and error-free.  

7. Uncover Strategically Located Properties  

It’s no secret that well-connected properties with high accessibility and walkability scores tend to attract higher demand. Before investing in a property, take the time to analyze the surrounding area and neighborhood and determine if they’re attractive enough for potential tenants and/or clients. You can look at features such as proximity to highways, public transportation options, bikeable lanes, walkability score, as well as the availability of parking lots and spaces.  

8. Identify Properties with High-Conversion Potential  

As vacancies in the office sector have increased significantly in the past few years, adaptive reuse has appeared on investors’ radars and many CRE properties have undergone transformations and conversions, mainly into residential spaces – and sometimes to coworking spaces –. Especially when planning a long-term investment, CRE market research should also include a conversion feasibility index for assessing a building’s conversion potential. This will allow you to easily discover buildings with high conversion potential in your market of interest, which ensures that, regardless of future shifts and market conditions, your investment will still pay out.   

9. Become Familiar with the Local Regulations and Taxes  

Taxes and zoning regulations are highly dependent on a complex set of factors and can differ vastly according to location. This is why it’s important to carefully assess the local tax environment and business regulations before making any kind of investment decision. Investor-friendly policies can reduce costs and increase profitability, while stringent regulations may limit returns and even hinder project execution.  

10. Gain Insights on Demographics and Population Growth  

Population trends, such as migration patterns or age demographics, provide insights into the types of properties in demand, whether residential, retail or office spaces. For instance, a growing young professional population may signal increased demand for coworking spaces or mixed-use developments. By conducting a commercial real estate analysis and understanding these dynamics, investors can proactively identify high-growth areas, anticipate demand, reduce risks and position their assets to capitalize on emerging opportunities.    

Conclusions 

Understanding market dynamics enables better assessments of property value, infrastructure and long-term demand, ensuring investments align with current and future trends. CommercialEdge Research is a complex yet user-friendly CRE database that supports comprehensive market research based on verified data from over 13 million property records nationwide. Moreover, the Research platform offers valuable insights into specific data points – such as true ownership, construction data, current leases, sale comps, or office-to-residential conversion feasibility – along with local market insights based on real recent deals.   

Equipped with such insights, investors can confidently navigate the complexities of the commercial real estate market, avoid risk and maximize the return on their investments.