The proliferation of Big Data technology is starting to drive decision making for commercial real estate brokers and their office tenant clients. These broker tools are able to easily collect, sort and compare inputs, then accurately project performance, which provides office users the valuable insights for their decisions.
One of the most innovative applications to debut is the proprietary use of office lease analysis tool set that Jameson Commercial Real Estate is deploying to its office broker team at chicagoofficebroker.com.. This lease analysis is recognized as the industry standard for analyzing, comparing and reporting lease proposals. It combines the power of Big Data with powerful financial modeling algorithms that are proving to be a game changer for commercial office lease tenants.
The data output provided by this tool-set is uniquely comprehensive, with many pages of detailed items to pick from. Just some of the key metrics to sort, analyze, track and report, include:
- Internal rate of return (IRR)
- Breakeven dates
- Property analysis
- Property summary reports
- Underwriting reports-proposals
- Proposal details
- Cash flow
- Rent sensitivity analysis
- Assessment history
- Auto lease comps lists
- Peer property comparison
- Cash flow totals and year one
- Net present value of all lease costs
The lease analysis used by Jameson allows its brokers to create a side-by-side comparison of potential leases simultaneously, manage, track and share lease versions continuously, and apply Big Data insights to create cash flow modeling, analyze key metrics, view graphic charts and more.
This can be used for comparing individual new space options with their square feet but also more generalized comparison data to evaluate building-to-building even for potential renegotiations.
“From 35 years ago, as a commercial broker for office tenant representation, this is the most powerful technology tool I’ve ever seen,” said Bruce Fogelson, an Office Tenant-Rep Broker at Jameson Commercial Real Estates. “It provides a valuable opportunity to evaluate my clients’ leases and buildings side-by-side with others comparables and provide a comprehensive analysis.”
“Obviously, this is an almost unfair advantage when my clients are making decisions about negotiating contracts and or choosing properties,” added Fogelson. “But even if it’s not yet time to consider adjusting or ending an agreement, this provides endless value as a data tool and I make it free at any stage of a tenant’s lease.”
Sophisticated cash flow analysis can be simplified by the algorithms, so users can fully understand their options and make smart decisions, quickly and with confidence. Some examples of how brokers for commercial tenants are using Jameson’s analysis include:
- Comparing multiple spaces with different lease terms quickly and easily
- Handling space expansions, contractions and subleases more efficiently
- Sharing lease proposals and tracking different versions
“There’s nothing to compare with a broker’s market knowledge but this system plugs into the general market data resource, or commercia MLS that Jameson subscribes to. It lets us see the market and narrow down the choices quickly. What if?’ scenarios used to be complex and time-consuming, and they weren’t always easy to compare,” said Fogelson. “Now when a tenant client comes to me with questions, we can have answers ready for them. It’s saving them time and resources and delivering incredible visibility into all aspects of the market.”
Finally, current events can make the commercial market complex to sublease. With a tool like this for tenants can take advantage of knowing about having to sublease with the economics and alternatives like a landlord does.
As lease decisions in the modern world change the scenarios must change too, and quickly. The ability to email reports and variations directly and in real time with office tenant’s input Jameson Commercial Real Estate can stay ahead of the curve. As Fogelson says, Time is of the essence in office leasing ™.