What is the economic state of the Central Business District, industrial park, commercial area, shopping district, residential neighbourhood, city or region? Where is it in the real estate cycle: developing, mature, declining or transitioning? Property tax is the principle source of municipal revenue and the municipality is typically the second largest stakeholder, after the mortgagee, in most properties. Yet planning policy often proceeds without explicitly considering the economic viability of the real estate that generates most of the municipality’s operating revenue, now and in the future. If Capital Investment decisions are made without due consideration of the future property tax potential of the area, they can result in a misallocation of resources.
We look at the drivers of economic activity. Are they stable, getting stronger or weaker? What are the real estate, business and employment trends? What are the strengths, weaknesses, opportunities and threats? How does the area compare with similar benchmark areas? What does the future hold? Will the area continue to develop, remain stable, decline or transition to a different purpose? This type of analysis informs the municipality, province, economic partnership or development authority on the economic state and future potential of the area. Utilising our property tax, valuation and Geographic Information System (GIS) expertise we draw on statistical, economic and property databases to determine area status, competitiveness and trends.
We undertake Economic Analysis on defined geographic areas that have common economic drivers:
The scope of the assignment and methodology employed is tailored to the geographic area involved and the predominant real estate uses that support it economically. In the case of a mixed-use area such as a Central Business District for example there are often two predominant economic drivers, offices and apartments, which sustain a dependant driver, retail (coffee shops, restaurants, bars, entertainment, boutiques). The assignment would then involve the following:
(1) Determine the geographic boundaries of the Central Business District.
(2) Identify comparable Central Business Districts in other municipalities for benchmarking purposes.
(3) Analyse business location counts by industry group in the foregoing areas and benchmark the subject CBD against the Census Metropolitan Area.
(4) Use our proprietary office market survey database to assess the state (existing and trend) of the subject CBD and benchmark it against the other CBDs.
(5) Establish an overview of residential and trends in the subject CBD through an analysis of building permits, census data and CMHC housing data.
(6) Establish an overview of labour force and employment trends in the subject CBD, the municipality and Census Metropolitan Area.
We are able to draw on a rich vein of resources, many of them proprietary. CompuVal® our, information technology platform, acquires, processes, refines, integrates and analyses data from multiple diverse sources. It currently contains information on over 300,000 sales and lease transactions, together with assessment information on 39,000 commercial properties, in Atlantic Canada and Western Ontario. We also maintain and have access to MLS® residential sales databases in the Atlantic Region, together with short term rental listing data on 17,000 unique properties from AirDNA. We access Demographic data from Statistics Canada and household spending data from Environics Analytics. In addition to our proprietary software, we utilise ESRI and MapInfo GIS tools, the SPSS statistical suite, building cost and other real estate software.
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