When it comes to real estate, you may think that finding a new build to suit opportunity is as simple as a search on CoStar. However, for a more strategic and valuable approach, there’s a lot more to know about the site selection process.
According to The Economist, the world’s most valuable resource was oil. Now it’s data. And, the site selection process is no exception to this demand.
So, here are some data-driven measures to take when looking to expand your store footprint and uncover the location that will work best for your company.
Use a geographic filtering process
In a world of constant technological advancements, it only makes sense that the process of locating your ideal site has improved, too. So, based on your project criteria, you should be performing a sophisticated geographic filtering procedure. Doing so will influence many factors in your decision such as tax incentive opportunities and high-competition areas.
Aligning the filtering model with your criteria should produce the relevant data for variables such as population demographics, unemployment rates, cost of living, utility costs, wages, tax rates, and more.
*Tip: Using a commercial real estate platform such as DealforceCRE can streamline the process of sharing data by centralizing it for each project in its own collaborative portal.
Perform a more in-depth location analysis
Once your long list has been condensed to 5-10 candidate locations, the site selection team should conduct a deeper analysis. This research should tell the story of each site’s workforce, infrastructure, logistics, business climate, economic incentives, and real estate market analysis.
Location analytics = quantifying a location to gain a critical perspective of the surrounding area of a property to ensure the proper evidence for an educated decision.
The data research associated with this step includes primary research and a more detailed demographics report. The findings here should include area-specific education levels; historic unemployment rates; competitors’ sizes, locations, and wages; employment drivers; recent expansions and closures; logistics costs; customer accessibility; and any other information that will aid in meeting your business goals.
Consider an experienced site selection team
Joining forces with a team that is up-to-date with the latest data-driven methods in site selection, such as a preferred developer of national tenants, will increase your confidence in the process of finding the winner. This phase of development calls for an extensive amount of analysis, so be sure you are asking these questions during the site selection process.
“Location, location, location” has been replaced with “location, experience, analytics,” according to Deloitte. Partnering with a developer’s site selection team should put the “experience” in the new mantra.
Also, the team should be well-equipped by using a weighted model. This will rank each potential location by both qualitative and quantitative factors including labor market scalability, workforce demographics, cost of living, operating costs, etc.
When it comes to the retail sector, which is always evolving, using data-driven systems to strategically increase your store’s footprint is the most critical decision you can make in the early stages.
This article is intended for informational purposes only and should not be used as a substitute for recommendations or services provided by a licensed professional.