By Altus Group | November 2, 2020

Video: Commercial Property Comparative Analysis

ARGUS Training Manager – Americas, Jessica Leal, shares in detail how to use sales comps as modeled in ARGUS Enterprise for Cloud. Watch the video or read the entire transcript below.

 

 

„Commercial Property Comparative Analysis,“ Transcript

Hello everyone, my name is Jessica Leal and I’m the training manager for our America’s region. And today we’re going to talk about commercial property comparative analysis. Now when we talk about property comps there’s really different types.

We have leasing comps and we have sales comps. Today we’re really going to focus on sales comps and this video actually serves as a bit of a follow-up video to the Commercial Property Comparative Analysis insights article.

Now when we talk about comps there’s a lot of things that go into deciding what is a good comparable, such as location, physical characteristics, use type of the property, transaction dates, occupancy, all of these different factors go in and really deciding what property is a good comparable to another property.

So if we’re thinking of purchasing a building typically comps go into the analysis of deciding if this is a good purchase or not. And now, there’s a lot of other items that go into this as well, such as valuing the building using DCFS we’ve talked about in one of our previous videos and other methods of valuation.

However, another portion of this is having good comps to compare that property to. And a lot of the times these comps are used to really find the different inputs that go into those methods evaluation. So what I want to talk a little bit about today is how to use comps and really one of our comps tools in ARGUS Cloud. And so if I navigate over to ARGUS Cloud I’m already logged in. Now once I am in my ARGUS Cloud. I will see all of my different portfolios and I’m actually going to open up my Northeastern portfolio. When I open up my Northeastern portfolio I’m actually going to navigate over to my assets tab. And once I navigate to my assets I’ll see all of the different assets within this portfolio.

Now the tool that we’re going to be using today is really our Benchmarking tool. And what it’s going to allow us to do is it’s going to allow us to click on one of these properties. And then be able to see the comparables to this property. Now what it’s going to be doing is it’s actually going to be comparing this property to our comps database that we have the ability to set up.

And the way that we do that is we can actually go to our settings. And we can configure the comps database where we include any portfolios that we want to include, as well as any scenarios in that comps database. And that is setting up the database that’s going to have all of the different properties that the Benchmarking tool is going to compare to whichever property we click on.

And so to give a good use case of our Benchmarking tool lets say that we were thinking about purchasing Cornell crossing. So what we did was we went ahead. We brought it into ARGUS and now we want to go ahead and see if we have any comps in our database that we could compare to Cornell crossing. So, I’m going to go ahead and click on Cornell crossing. It’s going to show you some of the basic details of this property.

And then if I click on comparables it’s going to show me all of the different properties in my comps database that are good quality comps to use for Cornell crossing. So it will start Cornell crossing will always
be that very first column. It will list out the competence percentage. So you could see that up at the top, the highest one is Appellation Center. And then it will list out many of the things that we mentioned earlier.
You know:

  • “What type of property is this?”
  • “What is the occupancy of these properties?”
  • You know, “Why are they good comps?”
  • “What is the area?”
  • “What’s the IRR are for these properties or the potential IRR, the discount rates?”

And so on.

And so we are taking this potential purchase and we are comparing it to other good comparables within our comps database. Now not only does it give you that information down below. But up top, you do have an interactive map. So you can see where each of the comparable properties are located in regards to our subject property, which is Cornell Crossing.

And so that is actually it for insights video this week. Remember if you have any questions about the program about any of our solutions any of our training options. Remember, you can always reach out to us. Thank you so much.

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