Market Aloft: The Birdseye Approach

prescott-center-map-250Sound commercial investment is always based upon a perspective from aloft.

This aerial image of Prescott, Arizona’s downtown commercial area does not tell us much. It simply makes me wonder what is happening north, south east and west of the core area. There is a need to pan.

Market perspective plays a huge role in the analysis and decision making behind NOI, ROI and long term wealth accumulation for an investor. Putting distance between oneself and the market creates a better view.

Today, perhaps more than at any time in the last decade, market perspective counts and can easily impact a commercial transaction’s ability to perform and deliver the desired financial objective.

Lenders are looking at transactions with an eye toward long term performance based upon what I might call property actuaries. If a property segment (type) such as retail, medical, industrial, multi-family is on life support, the lenders are going to factor that illness into the capital risk formula.

New investors and current owners should insist that their commercial broker illuminate market trends because these north, south, east and west views of the total market will (notice, I didn’t say, “might”) impact performance.

Markets such as central and northern Arizona and their key communities of Prescott, Sedona, Flagstaff, Payson and Kingman are inseparably linked to metro market trends.

At Arizona Commercial, we study the markets. We are deliberately assertive with clients about where the market is going, not just where it is today.

The birds eye approach means looking at the market from above and understanding what the various segments and pocket are doing and where they are likely going.


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