A nuanced view: The Commercial Real Estate Forum

This fall, the Center for Real Estate Theory and Practice at the W. P. Carey School of Business enlisted brokers to provide a new window onto the Phoenix real estate market. The Commercial Real Estate Forum will convene quarterly to discuss what’s happening – and about to happen – in the commercial sector, from the point of view of brokers.

Nobody knows commercial real estate like brokers, according to Pete Bolton, managing director of Newmark Grubb Knight Frank (NGKF). “Brokers spend their lives on the street,” Bolton says. “We talk to tenants all the time, yet no one ever asks us what we think.”

Not anymore. This fall, the Center for Real Estate Theory and Practice at the W. P. Carey School of Business enlisted brokers to provide a new window into the Phoenix real estate market. The Commercial Real Estate Forum will convene quarterly to discuss what’s happening – and about to happen – in the commercial sector, from the point of view of brokers.

The purpose of the forum is to provide consensus on key indicators of the commercial real estate market in the Phoenix metropolitan area. Conducted as an open discussion facilitated by Bolton, the forum focuses on the day-to-day experience of commercial real estate brokers in order to detect current trends, discover similarities and differences among various sectors and submarkets and document the anecdotal evidence and insights of the group.

Mark Stapp, director of the Master of Real Estate Development program, invited brokers and research analysts from most of the major firms, spanning all of the sectors (land, multifamily, industrial, office and retail), to be part of the group. All of the members, except for Bolton, are anonymous, assuring a frank discussion uninhibited by concerns for client reactions. The group met this fall, and will reconvene quarterly.

Stories behind numbers

Perspective born of the experience of brokers has the potential to add nuance to data-based analysis of the market.

“This panel will go beyond simple backward looking statistics to discuss the factors that impact developments in the market,” Stapp says. “These people deal with the market everyday. They know the critical elements affecting commercial real estate.”

Some of the topics to be covered include:

• Submarkets – Which are the “hot” and which are the “not” submarkets and why? Where are they?
• CAP rates – Where are they going this year? Up or down?
• Construction costs – What are they? Are they going up?

Brokers will receive a survey in advance of every meeting. The discussions will center on the results of that survey and what the professionals think will happen in the next three months. At the close, the brokers will be surveyed again, to see if opinions change. A distilled version of each discussion will be posted every quarter. 

The forum will meet again in January, when it will evaluate the projections it made in September and turn its attention to first quarter 2014.