The question is to ascertain the opportunity for that property. For example, people who invest in distressed real estate could see a particular property as a great deal while others would simply discard the idea. Lauderdale, Florida, noted that his firm does a market analysis for the proposed product that it is contemplating. If it appears to be on target, the next srep is to evaluate the return on its investment over the proposed holding time. If we can't earn an IRR of at least 20 percent, we pass.
Some firms use a grading system to select among various opportunities.
Luis Belmonte , AMB Property Corporation, San Francisco, California uses such a system to look at opportunities in its markets and submarkets. The company's research model is based on market demand both from a historic perspective and on projected macro economic data. AMB's main interests are the big hub markets. Steven Pumper , president of owner advisory services for Transwestern Commercial Services, advises third-party institutional clients on strategies, emerging industry developments and opportunities that can benefit their operations on a national level. Research, according to Pumper, is a key component to help clients evaluate business situations.