rEAL eSTATE economics

Real estate economic consulting involves the provision of analysis and strategic advice to help developers, investors, and public agencies make informed decisions about property development, acquisition/disposition, and investments. The work typically involves two main areas: market analysis and financial feasibility, although these can be part of a broader strategy overlay for some clients if such services are not provided in-house.

Market Analysis

• Understanding Demand and Supply
  Assessment of local and regional trends, such as population growth, job creation, and consumer preferences, to forecast demand for different types of real estate—such as apartments, offices, retail, or industrial spaces. Analysis of the existing supply and competition to identify market gaps and opportunities.

• Highest and Best Use Studies
  Determination of the most profitable and suitable use for a property, considering legal, physical, and financial factors. 

• Market Cycle Analysis
  Monitoring real estate cycles—periods of growth, stability, and decline—to help clients anticipate risks like oversupply, declining rents, or changing demand. This helps clients time their investments and development projects for maximum benefit.

Financial Feasibility 

• Feasibility Studies
  Financial modeling is used to test whether a proposed project is likely to be profitable. This involves building detailed cash flow projections (proforma analysis), that take into account construction costs, financing terms, expected rents or sales prices, and absorption rates. This helps clients decide whether to proceed, adjust, or abandon a project. Included in this is valuation and return optimization: exploring ways to maximize returns, such as changing the amount or mix of uses in a development, and/or phasing construction to match market demand.

• Economic/Fiscal Impact Analysis
  Evaluating how a new development will affect the local economy and government finances. This involves comparing anticipated tax revenues from a project with the costs of providing public services, and helping cities and towns make informed policy decisions. Job creation, spending, and multiplier effects are also calculated.

Development Strategy

• Vision, Scope, Schedule, Budget: Define goals, assess opportunities, develop roadmap

• Feasibility Analysis: Market research, financial modeling & proforma analysis, risk assessment

• Predevelopment: Site selection, due diligence, regulatory planning, zoning and permit processes, entitlements, exactions/incentives

• Financing: Capital structuring, sourcing debt/equity, negotiations

• Design & Planning: Providing or review/oversight of design, to ensure alignment with budget and vision

• Construction Oversight: Project management, schedule and budget control

• Marketing & Disposition: Positioning and pricing, sales/leasing strategy, exit planning

Some examples of project work are listed below; click on each link for more information. For more on proforma analysis, click here.