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Real Estate Economics

Real estate economics are often the core factors that determine whether and how a project will “work.” This includes assessment of the market potential for a given development program through review of market demand and competitive supply. Real estate financial analysis then builds on this foundation by analyzing whether the project will be financially feasible, as proposed.

SB Friedman routinely works in all aspects of real estate economics, frequently within the context of public-private projects. Our firm has access to a range of powerful data sources and analytical tools for such applications as market supply and demand analysis, financial pro forma development, and project benchmarking.

Services

Market Analysis

Market analysis is one of the firm’s core service areas. We have conducted market studies for numerous sites, corridors, downtown areas, whole communities, or even multi-community study areas for both public and private sector clients. Market studies shape a development program for a site or larger study area in both urban and suburban contexts. In many cases, they are part of larger planning projects, in which the development program guides the physical concept plan to ensure that the plan is market-responsive.

The hallmark of our approach is a detailed analysis of both the demand and supply sides of the real estate market, and a reconciliation of this demand and supply to synthesize a detailed development program.  As a part of this analysis, we ascertain real estate market trends, competitive position, market niche and concept, absorption and pricing, physical development requirements, configuration and integration of uses and users, tenant mix and leasing parameters. We routinely deal with all major land uses, including residential (both for-sale and rental housing), retail, office, industrial, and business park uses.

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Financial Feasibility

SB Friedman frequently analyzes proposed projects to determine their level of projected financial feasibility. These analyses can help our clients test development scenarios, and make policy or investment decisions. We perform these analyses in support of financial negotiations, requests for public-private financial assistance, land sale transactions, and land use/density regulation decision-making.

Public-Private Financial Structuring

SB Friedman is skilled in combining complex public-private financing tools to facilitate development projects. We understand the different dynamics that arise for public, private and nonprofit/institutional clients, and are adept at selecting the right mix of tools and deal terms for each. We also routinely support our clients in negotiating and structuring public-private deals involving TIF, tax abatements, land write-downs, tax credits, loan guarantees and other tools.

Gap Financing Analysis

We have provided over 150 evaluations of proposed public-private financial transactions to more than 50 clients. Our municipal clients typically take a “gap analysis” or “but for” approach to sizing public-private financial assistance or subsidy. Thus, the subsidy is tied to the specific extraordinary costs and demonstrated need for financial assistance for a given project. Our analyses frequently include deals where multiple tools interact with other financing sources such as New Markets Tax Credits, Historic Tax Credits, Low-Income Housing (Sec. 42) Tax Credits, HUD 108 and 221(d)4 loans, Special Assessments, and others.