While competitive benchmarking has long been a staple for commercial real estate (CRE) professionals seeking to navigate this complex market, traditional methods often struggle to keep pace with the rapidly changing landscape.
The challenge? You're either swamped with data struggling to mine actionable insights, or facing a lack of information that leaves you grasping for meaningful conclusions.
Enter AlphaMap – a powerful geographic information systems (GIS) based tool designed specifically with CRE professionals, like you, in mind. Join us as we explore how AlphaMap redefines the competitive benchmarking process, providing the insights you need to stay ahead.
Understanding Competitive Benchmarking
Competitive benchmarking within the CRE sector involves the process of evaluating your property in relation to competitors' properties, typically of comparable type or size.
It's also beneficial to benchmark a property against itself to gauge changes over time or against other properties in your portfolio to assess performance. However, contrasting with competitors can reveal distinct and valuable insights.
In CRE, competitive benchmarking yields insights that assist in:
Navigating Deals
Examining the value of similar types and sizes of properties within a 1-mile radius (or closer) to your property assists in determining if your potential investment aligns with the market value, or if it’s priced above or below it. Researching current rental rates helps project potential leasing income or estimate what you might expect to pay if leasing.
Analyzing Market Trends
This process includes market research, strategizing for retail, pinpointing ideal target markets, and identifying areas for focus. Solid market research helps businesses to adapt to current market demands and anticipate forthcoming trends, which are integral to staying relevant.
Choosing Ideal Locations
In retail, competitive benchmarking allows you to recognize neighboring brands and prevent market oversaturation within a specific property type. You can position your store in a location with businesses that complement you, instead of competing with others for the same customers.
Finding High-Quality Tenants
Competitor analysis facilitates the optimization of your tenant mix, aiming to ensure it is complementary and advantageous for your location.
Optimizing Investment Strategies
Identifying the strengths and weaknesses of properties can lead to improved investment strategies tailored to the unique aspects of each asset.
Data-Driven Decision Making
Creating a solid foundation for data-driven decision-making is key for maintaining a competitive edge in the dynamic CRE landscape.
The Role of Data and GIS in Competitive Benchmarking
Accurate and up-to-date data is the cornerstone of competitive benchmarking. Typical metrics used by CRE professionals include property value, rental rates, occupancy rates, foot traffic, and more. The metrics you choose for comparison should align with your specific business goals.
For example, if you’re crunching the numbers on a new property deal, you’ll be interested in property values and rental rates. If it’s a retail property, you’ll also be concerned about levels of foot traffic.
GIS technology has revolutionized competitive benchmarking by streamlining access to comprehensive, actionable data. With platforms like AlphaMap, users gain access to:
- Data on more than 10 million commercial properties across the United States
- Insights aggregated from over 40 diverse data sets
- Accurate foot-traffic estimations sourced from more than 100 million mobile devices
By leveraging such detailed metrics, CRE professionals can delve deeper into competitive analysis —uncovering emerging market trends, identifying areas with unmet demand, and pinpointing properties that represent the most promising investment opportunities.
How to Drive Effective Competitive Benchmarking with AlphaMap – Step-by-Step
Step 1: Setup Account and Login
If you’re new to AlphaMap, you can start with a 14-day free trial to experience our powerful software firsthand. Existing users, simply login to your account. Here, a wealth of features awaits you to enhance your competitive benchmarking efforts.
Step 2: Use Map Explorer to Discover Location Insights
Use our Map Explorer feature to find out in-depth information on virtually any location across the US. Once you select a location you gain access to property records and zoning information which is particularly useful when researching property values and rental rates.
You can even use this feature to find out who owns the property in question. Map Explorer also gives you access to several analysis tools which identify trade areas and foot traffic information.
Step 3: Analyze Trade Areas for Optimal Site Selection
While in the Map Explorer portal, explore tools to assess the demographics, trade areas, and car traffic for your chosen location. With easily downloadable charts and analytical maps, compare competitor properties quickly, helping you to gauge market saturation and identify the optimal site location more effectively.
Step 4: Study Foot-Traffic and Location Rankings
Before exiting Map Explorer, you can access several key features using real-time mobility data. These include measuring true trade area and studying foot traffic (location and area visits).
Click on ‘Rank’ to see how the brand at the location in question ranks against competitors on a national, state, and city level – particularly valuable when determining a competitive positioning strategy.
If you’re keen to get even more granular, you can see an overview of tenants inside local shopping centers and compare them to your brand/business. You can also view the shopping center’s foot traffic statistics.
Step 5: Identify Competitors with TenantFinder™
Ready for a deeper dive? Click on ‘TenantFinder™’ to explore competing brands and businesses. This tool, designed for quick and accurate tenant finding for property owners, doubles as an in-depth void analysis tool.
Here, you can sift through various data sets on your competitors in just a few clicks, select different parameters to refine your search results, and easily download these reports for later review.
Step 6: Analyze Market Trends Using Report & Map Builder
Data doesn’t mean much if it’s not easy to understand. Our Map Builder portal arms you with everything needed to transform maps and trend analyses into stunning, visual reports that will impress your clients. Customize your reports to focus on specific competitive benchmarks for maximum impact.
Step 7: Put Insights into Action
Now, take the insights you've garnered to form actionable strategies for your CRE clients, or for your own business pursuits. Whether it’s identifying an underserved market, optimizing your property portfolio, or gleaning marketing insights, you're now equipped to make informed moves.
Avoiding Competitive Benchmarking Pitfalls
Competitive benchmarking can be a challenging process to get right. To ensure success, be aware of these common pitfalls:
Relying on Outdated or Inaccurate Data
It’s essential to use current and accurate data for benchmarking. AlphaMap guarantees you access to high-quality data, backed by the extensive volume of information on our platform that provides large sample sizes. We prioritize meticulous accuracy in all data provided.
Overlooking Comprehensive Market Analysis
It can be risky to focus on only one or two specific metrics without looking at a broader market context. AlphaMap offers a holistic view of the market, including demographics, foot-traffic data, and more, to provide a well-rounded competitive analysis.
Failing to Identify Relevant Competitors
It’s not always easy to accurately identify who your competitors are. With AlphaMap’s TenantFinder™, users can precisely identify and analyze competitors within particular markets or sectors. Our expansive brand database includes over 100,000 brands, covering national retailers to smaller entities, enhancing the accuracy of competitor identification.
Neglecting Location and Demographic Trends
To thrive in today’s competitive CRE landscape, understanding location dynamics and demographic shifts is key. AlphaMap's trade area analysis and demographic insights empower businesses to adapt to changing market conditions, helping to circumvent potential strategic oversights.
Data Overwhelm and Analysis Paralysis
Sifting through vast amounts of data without gaining actionable insights quickly leads to overwhelm. AlphaMap's user-friendly interface, and report and map builder feature streamline the data analysis process, enabling users to make informed decisions with greater efficiency.
AlphaMap Makes Competitive Benchmarking Effortless
Adopting AlphaMap for your competitive benchmarking needs marks the beginning of a more informed, strategic approach to CRE investment and development. Whether you're looking to optimize your existing portfolio, scout for new investment opportunities, or simply understand your position in the market better, AlphaMap offers a comprehensive, user-friendly platform to guide your decisions.
Consider taking the next step by arranging a demo with the AlphaMap team. We're here to support your journey toward strategic success in all your CRE endeavors.
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