Here at Valbridge | KC, we pride ourselves on our flexibility when it comes to different report types within the appraisal industry. This week we talk with our own Daniel Kann, MAI about Market Studies; specifically what they are and why they are so important. We hope you'll learn something from Daniel in this post, we certainly did! What is a Market Study? "A market study identifies the demand drivers for a particular type of property in a specific market or submarket. It calculates the residual demand based on current and projected growth and the amount of existing and future supply. In comparison, a marketability study focuses on how one particular property will interact within a market or submarket. Market studies are most commonly used in the multifamily space due to apartment projects being built on a speculative basis." Why Don’t Very Many People Perform Market Studies in KC? "Market analysis is part art and part science and requires an in depth analysis of the underlying fundamentals that drive supply and demand for a particular property type. The level of analysis included in a market study is not commonly utilized in daily appraisal practice creating a specialized niche within the valuation industry." Besides Here, Where Else Have You Performed These Studies? "I have recently traveled to Dallas, Richmond, Detroit, Jersey City, and New Orleans for market analysis. Traveling to an unfamiliar place and spending the time necessary to gain geographic competency allows you to learn interesting things about a particular city. After studying the urban core of Richmond, Virginia, my wife and I decided Richmond was a place that we would enjoy visiting and are planning to travel there in the near future." See Some of Daniel's Projects Below: We hope you were able to learn a little more about Market Studies! If you are interested in learning more or having a market study performed, click here to contact Daniel Kann. Since 2010 Daniel has specialized in all aspects of multiunit valuation, with an emphasis placed on marketability/feasibility studies and valuation for new construction. The last several years have been extremely active for multiunit housing. Daniel and the team completed valuation and consulting assignments totaling $2.3 billion in 2015 and $1.90 billion in 2016. Recent assignments in Kansas City include One Light, Two Light, Mission Farms, Woodside Village, Roaster’s Block, 51 Main, The Vue, Avenue 80, Prairie Fire Apartments, Union at Berkley Park, Heights at Linden Square, WaterSide on Quivira, and numerous loft and conversion projects in the urban core. Daniel is also active in the Section 8, Low Income Housing Tax Credit (Section 42), and senior housing space.
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Our Director of Multifamily Valuation, Daniel Kann, was interviewed by The Kansas City Star on the apartment boom in the Kansas City Metro! Check out the article below, as well as Daniel's bio. Daniel Kann, MAI Daniel appraised over two billion dollars of multifamily real estate in 2015 and is MAI designated through The Appraisal Institute. As Director of Multifamily Valuation, he oversees and implements all things related to the property type. Recently, Daniel has traveled throughout the country (Omaha, Dallas, Philadelphia, and St. Louis to name a few places) for various market studies. Daniel received his bachelor's degree from the University of Northern Iowa in Real Estate Finance and Marketing and is currently working on a master's in Real Estate finance and Construction from the University of Denver. Daniel is licensed in Kansas, Missouri and Illinois. We looked back through our Valbridge Advisor newsletter archives to find the most popular CRE articles of 2015. Take a look below to see the most prevalent in order: 1. 2015 and 2007: A Sense of Déjà Vu 2. Which Generation is Really Driving the MF Market? 3. Developers May Backfill Dead Metcalf Shopping Centers 4. Why the Apartment Cycle is Good for Five More Years 5. Kansas City's Office Market: A Look at the Latest Stats 6. Is Multi-family Rent Growth Hitting a Slowdown? 7. Time to Worry About Speculative Construction? Not Yet, Experts Say 8. Renner Commerce Center Sells for $13.15 Million 9. Walgreens in Shawnee Mission Sells for $7 Million 10. Land South of Kansas City Purchased to Prevent Future Development Below is an article from the latest National Valbridge newsletter featuring our Director of Multifamily Valuation, Daniel Kann, MAI: Sherlock Holmes could very well have become an income-property appraiser. Valbridge professionals act as detectives with every market and feasibility study they perform. Most often the mystery is to deduce the highest and best use of a property; in other words, the use that would produce the highest net return on investment. Valbridge's Daniel Kann, MAI, a multifamily valuation expert, undertook such an exercise when he performed a market and feasibility study for the owner of a 14-acre suburban site. His analysis began by determining what was physically possible for the site, what uses were permitted under zoning laws and deed restrictions, and what was economically feasible. Then his examination got really interesting. To estimate demand for different potential product types, he analyzed employment and income data, other demographic information, and existing and future inventory and supply in various stages of production. He studied market occupancy, projected absorption, and estimated sales prices and asking rents for various multifamily options. Daniel and his team evaluated 31 comparable properties in addition to the overall market, and analyzed the option of holding the site for future development versus developing it immediately. The market and feasibility study concluded that the area in which the site is located could not support additional rental housing. In fact, depending on the timing of additional phases at other developments, the market could become even more overbuilt — with increased vacancy, declining asking rents and additional concessions necessary to capture tenants. Rather, the analysis revealed, a for-sale residential use would be maximally profitable. The target market: professionals and empty nesters without children who have a higher median household income. The highest-return on investment type: a patio/villa home project. Daniel’s study illuminated even more, including the optimal mix of floor plans and unit sizes. Sherlock Holmes couldn’t have produced a more revealing result. |
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