Data. We use it all the time and we assume it’s accurate. We base decisions on it and place our resources at risk based on it. How would you feel if someone told you that the data you used in an important decision was absolutely inaccurate? Likely a combination of surprise, disappointment and panic, which is entirely understandable.
Fortunately for us here in the commercial real estate world, real estate in general is a highly supported industry. In most cases, immense, nationally based firms have extremely detailed data pertaining to commercial real estate. From the comfort of your office in Atlanta, and with the right website access, you can perform highly detailed property searches in Dallas, New York, San Diego or many dozens of other big cities. Property information is available across all categories: office, multi-family, retail, industrial, land and investment. Accessing this plentiful and readily available data is simply a matter of paying for it.
There is a reason the cities listed above were cited in that scenario. Each qualifies as a large metropolitan location, and one of their benefits is the excellent data. In our experience, the amount and accuracy of that data in a smaller tertiary market can’t begin to compare. But it makes sense. It only stands to reason that in a capital market, where many hundreds or thousands of paying customers exist, it pays to staff those areas with large workforces that can generate proper data. It also stands to reason that in areas that have only dozens of customers, the resources available to serve that market will only be marginal at best. Lacking adequate staff, the data can only be as good as the time spent to collect it. That is why, in our experience, purchased data in the northern Nevada market is of marginal use and only to be used after a high degree of validation and scrutiny.
The next logical question would be to wonder how commercial agencies in these smaller markets operate and assist their clients. Good question. In these markets, agencies have only four options:
- Use inaccurate, purchased data and hope it’s not too far off.
- Provide no true market statistical data to their clients and use your gut instinct for the market.
- Borrow data from others.
- Generate your own data through the tedious process of accumulating the market data as transactions occur in the marketplace.
If you are a client considering a location in one of these smaller markets, ask your agent how he or she accesses market data. Ask to see their reports and their databases. Those who put in the work to generate the important data will be happy to share it all with you. Those who don’t maintain this information will not, and it’s in your best interest to know who is who. You have the right to employ the firm that makes you feel the most comfortable, so don’t hesitate to ask questions like this.
For more information about finding the right agent and firm, we invite you to view the following: