The real estate industry is vast and booming. Nearly each region has countless properties that are owned and managed by big companies. From small businesses to corporations, there are many commercial offices that are just waiting to get bought out. Because there is so much information and competition available, companies need a solid way to manage this information.
One of the primary ways this is done is through Comparative Market Analysis. (CMA for short.) This effective marketing tool has helped millions of real estate professionals gain control over their industry and receive the answers to complicated calculations. The function of this strategy is just as important as closing a deal and getting clients. In fact, it is revolutionizing the way individuals navigate commercial real estate.
What is Comparative Market Analysis?
To begin, Comparative Market Analysis is defined as a tool created by those in the real-estate industry with the goal of determining the value of property on the market level based on what other properties in the area are being valued and sold for. This analysis helps database systems and brokers determine how much to sell a property for based on what the other buildings are going for.
For commercial properties, this value determination may be based on what’s around the area specifically. For example, properties in a upcoming city may be more expensive closer to the downtown area. Suburban properties may be listed at a lower price because the market for that area is low. CMA determines the algorithm behind city trends and comes up with a fair estimate of what the property should sell for.
Why This is Important to Commercial Properties
While real estate is generally aligned with residential homes, there is a huge market for commercial properties. Business owners and companies want to expand their reach to new areas. Therefore, they need to work with a trusted real estate agent who can provide them with an accurate estimate of how much a property is worth.
The same is true for commercial sellers. They need a real estate agent who is able to quote them the best price based on strategic comparisons. This is an essential tool for real estate professionals to have because it can help them predict which areas will be the next trending spots. Or, it can help them better serve their clientele. It is a strategic game of prediction, probability and social science that make up this section of marketing.
How Can Real Estate Professionals Implement CMA
Since CMA is relatively new, it is important for existing agents and brokers to understand how they can implement this into their daily practices. To begin, it would help them to know the logistics behind the commercial properties. For commercial properties, it would be wise to consider what the commercial property is selling for and then divide it by the annual mortgage. This will help you to determine what the sales prices should be and compare it to the ones in the area. Real estate professionals can utilize online marketing tools that specialize in determining CMA calculations for any given property.
Determining the Square Footage Numbers
Next, it is smart to consider what the selling price is per each square foot of the commercial building. Since commercial buildings are typically larger, this will help real estate professionals come to a starting place. Since comparative market analysis gathers the numerical information for you, it can help you to make the best investment based on the information provided. CMA means that real estate professionals no longer have to perform the tedious calculations towards determining the finances of their commercial properties. Rather, this tool can provide them with the stated information that will assist them in making the best decision.
Why Choose an Investor
A real estate investor can assist you with making wise financial decisions that will benefit your reputation, business and pocket. Landwin, convenient to Encino and Century City CA, offers investment opportunities in commercial spaces. Our goal is to buy and sell real estate with the hopes of expanding our company reach. With over 49 years of industry experience, we’ve sold over 10 million square feet of commercial real estate. Instead of going at this venture alone, consider using us for your commercial real estate needs.