Commercial real estate is a business built on comparables. That is to say that the prices investors or tenants are willing to pay for a property are typically based on the prices paid by other investors/tenants for similar properties in the same market. For this reason, it is imperative that commercial real estate firms have a thorough understanding of the markets in which they currently operate or plan to operate.
To obtain, analyze, and interpret market data, many commercial real estate firms employ a market researcher.
A market researcher’s job is to perform quantitative and qualitative research on markets in which a firm currently operates or on markets in which a firm plans to operate in the future. Their analysis is compiled into research briefs or memos and provided to the acquisitions/underwriting teams so they can use it as an input into their capital allocation decisions.
What are the day to day responsibilities of a market researcher?
A market researcher’s day to day tasks typically include the following:
- Collecting Data: A Market Researcher’s primary job is to collect data. To do so, they work with a number of sources and vendors to acquire it. Typically, these include government sources (Census Bureau, Bureau of Labor Statistics, etc), paid sources (CoStar, Reonomy), brokerage reports, websites, and their own primary research.
- Building Databases & Models: With the acquired data, the Market Researcher will build databases and models to track trends over time. For example, they may have a model that tracks cap rates for multifamily assets in their target markets over time.
- Analyze Data: Based on the data received and their models, Market Researchers analyze the data to tease out actionable conclusions that may be of interest to their clients/colleagues. For example, they may spot a pattern of declining vacancy in a given market and interpret this as a sign of growing strength.
- Reporting: Market Researchers write up their conclusions in periodic reports that are delivered to clients and colleagues to be used as an input in their investment decisions.
- Specific Projects: Market Researchers are often pulled into ad-hoc projects that are designed to accomplish a specific objective. For example, a large firm may be considering the purchase of a portfolio of industrial properties in a new market. To assist, they may call upon their Market Researcher to write a report on current market conditions that will ultimately validate or nullify the investment thesis.
- Team Support: Because data is used in many phases of the real estate transaction lifecycle, the Market Researcher may be called upon to support the broader investment team on an as needed basis. For example, a broker may be developing a pitch for a client and they will work with the Market Researcher to obtain data relevant to their pitch.
- Training: In many firms, there may be only one or two Market Researchers. As a result, they may spend some amount of time training their teammates on the use of research tools so that they may be able to do some basic market analysis on their own.
As commercial real estate markets and transactions become more sophisticated, they are increasingly driven by data. Those who have it and understand it can make more informed investment decisions, which can ultimately lead to more profitable outcomes. Thus, a market researcher is a critical member of the team.
When do you need to hire a market researcher?
A typical real estate analyst will be able to conduct light market research. However, deep dives into market intricacies require a professional.
Large firms or brokerages that have a regional or national presence are likely to employ an entire market research team and will have plenty of work to keep them busy, cranking out reports and supporting new acquisitions.
However, small to mid-size commercial real estate firms may not have the workload and/or resources to justify employing a full-time market researcher. In such cases, it may make more sense to hire a freelancer.
What differentiates a good market researcher from a great one?
There are many good Market Researchers and they may do a fine job for your firm. But, the great ones are able to develop unique insights from the data and can use them to make profitable, data driven investment decisions. To find a great one, hiring managers should look for candidates with the following characteristics:
- Highly Analytical: Fundamentally, a Market Researcher job is to analyze data and draw out key insights. Thus, the best candidates have highly analytical minds and the ability to connect the dots between trends in the data and capital allocation decisions.
- Organized: The best Market Researchers are incredibly organized individuals and have a knack for creating processes and systems to keep data organized.
- Highly Educated: Although not a requirement, the best Market Researchers have strong educational credentials with advanced degrees in: Finance, Accounting, Economics, Computer Science, Data Analytics, or Engineering.
- Technical Know How: To retrieve and analyze relevant data, the best Market Researchers have a high degree of proficiency with industry standard tools. For example, they know how to navigate through major databases and data sets from the Census Bureau and use tools like Tableau or Microsoft Power BI to analyze the data and draw conclusions.
- Diligent: Often, research reports need to be pulled together quickly to support an investment decision. So, the best Market Researchers are diligent and able to work under pressure to meet aggressive deadlines for new deals.
- Excellent Writing Skills: Retrieving and analyzing data is only part of the job. The best Market Researchers are able to take their conclusions and communicate them clearly and concisely, in writing to interested stakeholders.
- Ability to Deliver Effective Presentations: Much of a Market Researcher’s job is done “behind the scenes,” but they are often called upon to deliver presentations to clients, colleagues, and management. The ability to create and deliver effective, persuasive presentations can really set the great Market Researchers apart from the good ones.
- Collaborative: Market Researchers are part of a larger team that is focused on delivering consistent, profitable returns to clients and investors. The best ones recognize this and have the ability to collaborate with their team members to make timely, data driven decisions.
As commercial real estate markets become more sophisticated, investment decisions are increasingly being driven by data. The difference between those that have it and know what to do with it and those that don’t is often the difference between a firm that makes profitable investments and one that doesn’t. For this reason, it may be more important than ever to have a great Market Researcher on the team.
Where can you hire a market researcher?
Hiring a great market researcher can be difficult. Competition can be intense, salaries can be high, and those with the skills to set themselves apart from the crowd have their pick of jobs to choose from. Bullpen can help.
At Bullpen, we specialize in helping commercial real estate acquisition and development firms find and hire the best freelance market researchers in the industry. We pre-screen the candidates, verify their experience, and handpick the best talent for your hiring needs … all within 72 hours.