How do you do real estate comps?
Doing my PE internship and I have to find a set of comps for a commercial building. How do I go about finding them?
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costar, rca, reis, brokers
On top of what Jimbo said, you could drive around the area of the subject building and look for buildings that are similar. Harder to do for industrial, but for retail and office it works.
Great idea if this was the 90s. Just use CoStar.
ask the brokers that are supervising the sale, they usually have letting and exit / entry comps ready for you
Think like an appraiser.
Appraisers subscribe to expensive services that find them comps, but good appraisers rely also on a network of relationships with brokers and agents who can provide them with sales data. This costs nothing but the time to develop these.
You can try to ask around and develop relationships with appraisers who already have these contacts.
Related question on this: For office sales comps (and calculation of acquisition basis) on a price PSF basis, what square footage do you all use as the numerator? Current in-place square footage or the BOMA adjusted square footage?
I've heard arguments for both sides:
The argument for the in-place square footage is that is what you are actually buying based on the leases, and it may be several years before you are able to mark-to-market the SFage (if the tenants accept the increase at all).
The argument for BOMA square footage is that this is what the building actually is, and in essence, the in-place leases are essentially just paying a lower rent PSF based on the true PSF and there is a MTM on their size.
I'm assuming there is varying opinions on this depending on what purpose you are using the comp for (to show higher or lower PPSF)
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