Marketed space complexity in CRE
This post aims to simplify the complexity of a specific niche of commercial real estate.
That specific niche: marketed space permutations – also known as the various transactions (sales or lease) that can happen on a property.
It is possible, and not abnormal, to have the instance of a single property that may have
- Units to let
and / or
- Units for sale (either only the same above units to let, or some of the above units, or all)
and / or
- The entire property for sale
…all happening at the same time.
For example
A developer has built a property on risk. That developer, as a “first prize”, is looking for a tenant for the whole property.
However, if such a tenant can’t be found, the developer may consider other options.
Options are:
- Selling some units, and leasing the balance, or
- Selling all units (either by selling the property in a “wholesale” deal, or selling the units individually),
In this situation, the developer will react to the demand of the market.
Gmaven caters for all these real life marketed space permutations.
For sale vs to let – the difference
For sale:
- You can have a scenario where a property is for sale, but its units are not for sale.
- Similarly, you can have a property which is not for sale, but its units are for sale.
To let:
- You can not have a scenario of a property to let, but its units are not to let.
- Similarly, you can not have a property considered not to let, but its units are to let
Other point – properties to let
Properties can be for sale. And an entire property can be considered to let.
What an entire property to let actually means: the entire property is made up of one unit (sometimes housing complex spaces), and that one unit is vacant.
To keep things simple, instead of having two concepts:
- introducing a concept of “properties to let” (i.e. one unit per property), and
- then the separate concept of “units to let” ( I.e. two or more units to let),
… it is most efficient to handle all property vacancies data at the unit level.
A property to let will have a vacancy ratio of 100% (the to let vacancy area is the same as the property’s total rentable area/GLA). Click on this link to see the filter/query in Gmaven for all fully-vacant properties.
Other reading
Please click here to see more differences between commercial real estate and residential property.