Recent posting on my LinkedIn Page

If You Build It, They Will Won’t Come

This is a slight paraphrasing of the famous quote from the movie The Field of Dreams but the applicability to making real estate decisions is at the heart of it.

In the world of real estate, business intelligence starts with location intelligence. The bigger fool theory is still rampant in the real estate industry today. “If you build it, they will come”. It is incredible today that so many real estate location decisions are made with little or no knowledge of the true nature of a location as it relates to critical determinants for success. Developers, investors, lenders and individuals have for decades made location decisions with little or no true knowledge of the many critical variables that affect the use of a piece of real estate for their intended purpose.

I have been fortunate to have successfully survived in the commercial real estate investment and development industry for more than 40 years. These days I spend most of my time helping clients make successful location decisions. One lesson that I learned is paramount. Unless you learn to make intelligent and informed location decisions for your intended business purpose(s) you are most likely doomed to failure from the start.

I am constantly amazed at the investment of millions of dollars that are wasted on real estate locations that have little or no chance of success for the intended purpose(s). Unfortunately, many investors/developers get lost in the dream of future success and make location decisions based on emotions and instinct instead of the facts.

There are many relevant variables that can have an overpowering influence on success or failure in this industry. Fundamentally though, the three most important decisions you can make are “location, location and location.” If you make an uninformed location decision, no matter whether you are an investor, lender, businessman or a developer, your business is likely to perform poorly or fail altogether. A real estate location decision should be viewed as a probability curve. The more current and relevant input data you have on a location, the higher the probability that you will make a successful decision.

Technology has improved greatly in the past few years to assist in aggregating massive amounts of data that are relevant and critical to making geographical location decisions in any industry. Today it is possible to get as very granular using a variety of databases that include thousands of aggregated variables across the country. Many of these variables may be specifically relevant to your location decisions. The invention of GIS spatial mapping has been a monumental breakthrough enabling individuals to see, and understand, massive amounts of aggregated data in a geographic format. As the saying goes, “a picture is worth a thousand words”.

Location risk analysis is paramount for anyone seeking to make critical real estate decisions for any business, profession, or purpose. Helping clients to make successful location decisions is its own reward. For these reasons I have decided to begin a regular posting of methods and approaches that I use in helping clients make informed, intelligent, and successful location decisions.

We will begin with basics which may be familiar to many decision makers and then proceed into more advanced methods and systems of analysis including cloning by algorithms, void analysis, psychographics, retail location feasibility, supply versus demand Intel, suitability analysis and competitive location strategies. My hope is that some of these methods will help followers make super successful location decisions. These postings from today onward will be provided on my pages under the title “The Art of Location Risk Analysis”.