What is the first step in preparing a commercial real estate market analysis?

The first step in preparing a commercial real estate market analysis is product definition. This stage is crucial because it establishes a clear understanding of the specific type of commercial property being analyzed. It involves identifying the unique characteristics of the property type, including its size, sector (such as retail, office, industrial, etc.), and any special features that might affect its marketability and value.

By clearly defining the product, analysts can effectively focus their subsequent analysis on relevant data and specifics pertaining to that particular real estate segment. This foundational step ensures that the analysis remains targeted, which is essential when considering how various factors, such as supply and demand, competition, and local economic conditions, affect the specific type of property in question.

Only after this initial definition can analysts proceed with other critical components of the market analysis, such as assessing market inventory, historical demand, and recent transactions. This structured approach helps in making informed and strategic decisions based on comprehensive insights about the defined product and its market environment.