Market Analysis

[Big Owl]

Has anyone seen or have done a Market analysis on the condition of existing commercial uses and the impact of new projects covering the entire area of a jurisdiction? What I mean is a study that would evaluate existing commercial areas such as existing shopping centers and/or other business districts based on supply of existing space and demand of that space. In addition it may include a market area analysis to determine if there is demand for additional commercial uses with in a given market area. I am looking for some examples to see if something like that would be worthwhile to pursue. I understand that developers sometimes do market analysis prior to a project being built. I don't know if any jurisdiction ever done one to see if an area is over or under served and if additional space is necessary.

Thanks in Advance

Alex

 

[Cardinal]

Can you be more specific? You don't give us much information, but if I read it correctly, you are perhaps thinking of an economic impact analysis? These can be very useful.

 

[Big Owl]

Can you be more specific? You don't give us much information, but if I read it correctly, you are perhaps thinking of an economic impact analysis? These can be very useful.

I did clarify it but i don't think it helped much.

What i am after is examples of studies that examine the existing zoning by using factors such as vacant/not vacant; use; demand of space; market area of existing space; and so-on, determine if there is too much of a perticular district or not enought.

 

[Cardinal]

Now I get it. Yes, these are often done. Add in a consideration of the conditions of existing parcels (public services, environmental constraints, dimensions, etc.) and absorption rates, and you begin to get a good picture of the need for variously-zoned land. This kind of data can be especially useful when you expect to hear opposition from residents or property owners. It may help point out redevelopment opportunities. Unfortunately, while I have come across these, I do not have any examples in my library. Sorry.

 

[Doitnow]

I was associated in such works a long time back.
In fact some of the Real Estate Consultancies ( almost all of them Multinationals) in India do this study regularly to assess the changing potential vis-a-vis the market prices of built space.
Mostly used for commercial areas for two reason:
1. The private sector companies do this to assess the existing situation by finding out the total builtup space available and the total space sold out and being used.
(a) Done by a physical survey, this would give the real picture of the demand,
need and the supply of space.
(b) A temporal study and that too if done on maps( A GIS would be great to use
if the data is available, would bring out the changing trends and directions of
growth.
(c) Many times the results are startling about the kind of space which may be
lying waste. Sometimes the built up area figures may not match with the
parking and traffic figures.
(d) Such studies are also done by the real estate people for assessing the markets and suggesting to their clients. The government planning agencies to see if there is any glut in the market and use that data for new development
strategies or redevelopment plans.

2. Market studies for new development are done by large coporates in locating their whole sale and retail commercial activities. Some large township developers have also started doing some analysis of the housing stock and related retail commercial before they embark on to the construction stage.

Although I still advise some companies on how to go about such studies, most of my approach is based on ground realities and information available to me due to my professional experience and being a local lad I have the pulse of the market. Generally it doesn't go wrong.
SInce I haven't come across a specific methodology which can be applied anywhere when it comes to market analysis, I can only suggest that you work out your own methodlogy which would include secindary data collection, interaction with the building approval agencies, interviews and questionnaires, physical recce and photographs if possible, data collection on the spot posing as a customer ;-).
I would be interested to see your reply and if you are developing any methodology and what the results are.

All the best to you.

 

[Kiltie]

I did clarify it but i don't think it helped much.

What i am after is examples of studies that examine the existing zoning by using factors such as vacant/not vacant; use; demand of space; market area of existing space; and so-on, determine if there is too much of a perticular district or not enought.

The jurisdiction that I used to work for in the metro Phoenix area would often request market analysis reports for any major (ie over 100,000 SF) commercial or industrial development proposals.

As stated by the previous poster, they can be very useful. On one occasion, we required a developer to submit a third party market analysis to demonstrate that their proposed general plan amendment (from Rural to Regional Commercial) would be to the benefit of the community as a whole, not just the individual land owner(s). The third party report demonstrated that there was sufficient existing commercial zoned land in the area to meet market demands for the next five to ten years (depending on absorption rates). This formed the basis of our recommendation for denial - the application was premature, and only to the benefit of the individual land owner - and the Council agreed with staff :-D