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Leading Business Indicators to Track in Commercial Real Estate Brokerage

The local business community is the backbone of commercial real estate occupation and investment.  To have a healthy commercial real estate market you really require a vibrant and active local business community.  The growth of your town or city will have a lot to do with business vibrancy.

Successful Tenants and Businesses

Successful businesses can pay better rents and occupy the good quality investment properties in any location.  If you look at your local town or city you will soon see business segments and the precincts that are active and growing.  Can you categorize them?  What types of properties do they need from a locational perspective?  When you have the answers you have some valuable market intelligence to work with.

These are the leading indicators that I like to track as part of business growth and expansion:

  1. Newspapers and Business Articles – Look for the articles and editorials that talk about business mergers and corporate changes. Perhaps a new CEO has been appointed to your local business or branch of an important local company.  Company changes lead to operational change and that can involve property.  Make the call to the local business to follow up on any associated information that could put you in touch with the right people handling property matters.
  2. Land use and Vacant Land – When you consider the local property precincts you will see pockets of vacant land or redundant buildings that could be repositioned. What is the current position with supply and demand for property locally in certain precincts?
  3. Production Costs – Changes in production and supply of goods and services will impact business viability in your location. From time to time you will see business types that are under production pressure; perhaps due to the rising costs of raw materials and or transport.  Energy will also have a part to pay in business operational costs.
  4. Transport Systems – How easy is it for a local business to get goods and services to their customers? Transport routes and costs should be regularly assessed for industry types.  You will then know the preferred precinct locations for competitive business types.
  5. Staff and Access – For a business to thrive there needs to be a reasonable level of access to qualified and trained staff. Proximity to a town centre and the suburbs of a city will help in finding the required levels of staff to work in the business.
  6. Customer Sentiment – What are customers looking for in each of the major business segments? Are there a number of businesses competing?  Are there enough customers around to service?  If you look at each business segment you will soon see the more successful businesses for a type and a location.  They should become targets for prospecting and new client activity.

Given all of these simple things you can now see why it is so important to understand your local business community and their property needs.  Watch the business indicators and use them for the leads that they create.

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