CRE Submarkets 101: What You Need to Know
Welcome to the realm of commercial real estate (CRE), where location reigns supreme. But how do we navigate within vast metropolitan areas? Enter the concept of CRE submarkets – meticulously defined zones that empower informed decision-making across the CRE ecosystem.
What are CRE Submarkets?
Imagine a bustling city carved into distinct commercial districts. Each district, with its unique character and dynamics, is a CRE submarket. These boundaries, established by industry experts, consider various factors:
- Geography: Natural barriers like rivers or prominent roads often serve as dividers.
- Infrastructure: Major highways, rail lines, or business districts can shape submarket boundaries.
- Demographics: Areas with similar resident income, age groups, or business types might be grouped.
- Property Types: Boundaries may encompass areas dominated by office buildings, retail stores, or industrial warehouses.
Why Submarkets Matter
CRE submarkets are more than just lines on a map. They unlock a treasure trove of benefits for various market participants:
- Investors: Target submarkets with high growth potential or favorable risk profiles. Submarkets enable a granular analysis of rental rates, vacancy rates, and property values, leading to strategic portfolio diversification.
- Brokers: Develop targeted marketing campaigns for properties by understanding the tenant profile and business landscape within a submarket.
- Developers: Identify submarkets ripe for specific development projects based on existing demand and infrastructure.
- Tenants and Buyers: Narrow down location searches based on access to amenities, demographics, and proximity to target markets within a submarket.
The Power of Submarkets in SaaS and Technology
For SaaS and technology firms catering to the CRE space, submarket boundaries are a game-changer:
- Meaningful Benchmarks: Analyze customer data within submarket boundaries to provide insightful benchmarks like rental rate comparisons or vacancy trends. This empowers users to make data-driven decisions.
- Enhanced GIS Experience: Integrate submarket data into your Geographic Information System (GIS) platform. This allows users to visualize market trends on maps, leading to a more intuitive and informative user experience.
- Targeted Insights: Refine customer recommendation engines, comp analysis and other insights by leveraging submarkets within your algorithms. This equips users with location-specific intelligence for informed property selection and investment strategies.
By leveraging CRE submarket boundaries, SaaS and technology firms can position themselves as invaluable partners in the CRE landscape. These boundaries are available as shapefiles (polygons) delivered via bulks csv or geojson apis. Each submarket polygon comes with corresponding meta data to enhance usability within downstream geospatial applications.
In Conclusion
CRE submarkets are the building blocks for a deeper understanding of local commercial real estate market landscape. From investors and brokers to tenants and technology providers, everyone relies on submarket definitions to form the basis of their market analytics data strategy. By incorporating submarket data into your decision-making toolkit, you unlock the potential to navigate the CRE market with confidence and precision.
