determining value is on a cubic foot basis,” Conway says.
Warehouses are getting taller, in other words, and a cubic foot
basis is more appropriate.
Some lenders, such as those in the debt space, are using these
new metrics in their valuations, Conway says. Others, though, are
not, namely the construction and traditional bank lenders. This
dichotomy can be seen in other areas as well. Forward-looking lenders, for instance, are also increasingly adopting new technology to
help better source and service commercial real estate transactions.
It is natural that the twain are starting to meet—new data
sources coupling with the latest in such advances as predictive analytics. The result? A finance function that is getting smarter and
smarter for both lender and borrower alike.
CCIM Institute has compiled a list of new data sources that commercial
real estate investors will find invaluable as they source new deals.
Following are excerpts from that report.
GLOBAL BUSINESS INTELLIGENCE
A good global resource is Trading Economics. Leveraging official sources,
the site offers verifiable data from 196 countries including “historical data
for more than 20 million economic indicators, exchange rates, stock market indexes, government bond yields, and commodity prices.”
A PROXY FOR GDP
A great proxy for GDP is the rail traffic data produced by the Association of
American Railroads. Weekly and monthly rail traffic data and the more
comprehensive RTI report tell us what commodities and goods are moving, where they’re headed, and at what volumes.
If you’re looking for a comprehensive “CliffsNotes” to the economy,
head to Calculated Risk, a finance and macroeconomics site that tracks
and synthesizes all the pertinent economic news of the day, the month,
and the quarter. Here you’ll find just about every macroeconomic data
point and historical trend aggregated from the primary sources—filled
with prebuilt charts and rich analysis to put any economic metric in perspective and proper context. One of the site’s most valuable tools is its
Weekly Schedule that tees up everything you need to know—from jobs
and GDP to housing starts and the Federal Reserve.
SMALL BUSINESS ME TRICS
Small and midsize business activity is critical to the health of local communities and commercial real estate activity and material to leasing activity. The
monthly Small Business Optimism Index from the National Federation of
Independent Businesses is a must if you’re conducting feasibility studies or
market, valuation, and underwriting analyses. With over 45 years of small
business economic trends data at its disposal, NFIB delivers insights on everything from labor markets to capital spending to credit markets. For instance,
the index reached a record high of 108.8 out of 120 in 2018, helping explain
small business growth last year—and maybe its decline to 101 in 1Q2019.
Supplementing this resource is the National Center for the Middle
Market, which promotes and supports the growth and expansion of
middle-market companies. This business sector—companies with
annual revenue between $10 million and $1 billion—represents 33% of
private sector GDP in the U.S. and is the third largest global economy.
Housed at The Ohio State University, NCMM is the leading source of
research and data analysis on the middle-market economy and acts as an
incubator for the next generation of unicorn startups.
SEC TOR-SPECIFIC SOURCES
Another noteworthy source is Dunnhumby, a customer data provider
whose expertise in retail and grocery industry is of particular interest to
commercial real estate. The company goes beyond the general information offered by other organizations and takes a deep dive into behavior
and trends of the nation’s top 56 grocer brands.
The Association of General Contractors produces a monthly survey
that provides a thorough understanding of what general contractors are
experiencing and forecasting.
The Engineering News-Record offers a monthly periodical with a construction economics section and a 20-city index that details current and
historical data on actual material and labor costs.