Analytics Tool for Multifamily
Hi all,
I just started as an acquisitions analyst at a small multifamily development/ Asset Management shop. I have been spending a lot of time doing research and basically, I rely a lot on CoStar (full underwriting report). But I have been finding a lot of inconsistencies and errors that could sometimes be lethal to coming up with good assumptions for pro forma, making investment decisions and etc.
So I was wondering what other multifamily people are using. (I hear Axiometrics is pretty decent) Any recommendations on any other CRE data analytic tools?
Thanks.
REIS and RealFacts tend to be more accurate based on my experience
Without knowing exactly what kind of data you're looking for, there's always the stone-age approach for market rent - call comparable apartment complexes and tell them you're looking for a unit. Ask them how fully leased they are. You'll be surprised at the information some leasing folks will divulge.
Tangentially - I've heard stories of underwriters back in the day driving into parking lots of hotels they were doing and counting the number of rooms with lights on, in the early evening, for a few days in a row in order to corroborate occupancy numbers.
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Combination of Axiometrics, REIS, CBRE-EA, MPF, RCAnalytics, broker info, and primary diligence
Apartments - CoStar is trash for multifamily. Axiometrics for comps and Esri for demographic/psychographic. I use GIS a decent amount too for site analysis.
I'm curious, do you all use the sites mentioned above for rent comps and take that info for what it is, or do you double check and call the property itself as well?
Yep. This 100%. Axio is fantastic but never trust it completely.
Ok, I was trying to see if there has been a better way to do this. We primarily print out a data sheet and call each property as well, but doing this about 100-120 times a month adds up since we have to call back a few times to reach someone if they are 'out of the office'.
In this case, Axio is generally good for an initial run. I don't start diving deeper into these until later in the process.
My process is typically running an Axio report, usually like a mile or two radius around the site I'm looking at. I download the report into Excel, delete the pointless rows, and delete the properties that aren't really comps. Once I have that list (usually 4-6 properties), I go back to Axio, download the individual property reports from each into Excel, and the combine those all into one Excel file on different tabs.
The next step is converting those sheets into my company's comp format. I just use cell references to the Axio report.
Third step is confirming Axio's numbers. I cross reference the property's website and third party websites like apartments.com.
After all of that, I "spot check" the most often occurring floorplans. So if a property has 6 different 1-bedrooms, but they have 3 A1, 3 A2, 12 A3, 110 A4, 7 A5, and 7 A6, which isn't uncommon, I only call about the A4's, for example. That'll give you a good indication of how "off" your numbers are.
Once you have Axio data, property data, third party leasing data, and you double check what would be the biggest rent drivers of your model, it's really time to move on to other things. You can only spend so much time on minutia, especially when using comps to project rents isn't a science - it's more an art.
If i'd taken the time to write it out, this is what I would've come up with. Only addition would be in comp selection. Generally, the radius method works, but if you know you're micro pockets well then you should audible here and add something that may be further away. If you're doing a VA deal, you need to also comp who your comps are now as well as who they would be post-reno. When pegging rents, you want to leave some headroom btw your VA deal and new product.
CoStar is always a good place to start, but generally their data is hit or miss. Trust but verify is the best approach.
Great example, I used to be an investment sales broker (I'm a commercial appraiser now) and I was looking at one of my old firms deals as a comparable for a property I was appraising. CoStar said the deal traded for a 5.65 cap rate, when I knew it had actually traded at a 7.65 cap rate. 200 BPS is a big deal to have wrong when people are using that financial information to value other assets. Considering that CoStar literally has everyone by the balls and took everyone for a ride following the last crash, you would think they would make sure their data is correct and then audit that data on an annual basis.
Garbage in, garbage out...
rescour.com
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