Are you considering purchasing a commercial property in Austin, Texas? Working with a local commercial brokerage firm before you purchase a property can make the buying process much smoother, quicker and predictable for you.
If you’re located in another market, it’s important to familiarize yourself with the Austin market during the underwriting process. Local brokerage firms have a vast amount of knowledge about the commercial real estate market and can help you evaluate what properties will be the best commercial real estate investment for you.
At AQUILA, we’ve helped numerous commercial real estate investors from across the country and beyond evaluate and source properties in and around Austin. In this article, we’ll explain the two main reasons we always recommend engaging an Austin-based leasing broker before acquiring a property in Austin so that you can make the most informed decision.
How Local Leasing Brokers Can Help You Underwrite a Property in Austin, TX
If you’re in the process of underwriting an Austin property, a local broker can provide you valuable insights.
First, the broker can help you understand what the leasing landscape looks like. Because they’re in the market every day – talking to tenants and negotiating leases – they can provide valuable insight into the demand profile for the submarket and specific product type you are considering.
They will also be able to provide market analytics, including average asking rental rates and vacancy rates for the desired submarket. They can even provide a competitive set analysis that outlines competitive properties, historical performance and potential market assumptions for the asset you’re interested in.
Read Next: What Are Vacancy Rates in Austin, Texas?
Additionally, a local leasing broker will be able to help you evaluate the existing tenant mix and quantify potential mark to market upside. Other underwriting questions a local leasing expert can help answer include: Are the tenants diverse enough to bear fluctuations in the market? How likely is an existing tenant to renew? Are there any specific areas of concern? Further, if there is any existing or upcoming vacancy, what rates can you expect to obtain on these spaces? How much downtime should you assume? These are all questions that a leasing broker familiar with the market should be able to help you answer and bake into your underwriting for a specific project.
Finally, the broker should be able to help you understand what, if any, improvements need to be made to the project in order to position it to compete favorably within the market. They can help you understand how the building compares to its competitive set and provide recommendations in order to help it compete. If any major capital improvements need to be made, they can connect you to qualified local contractors who can provide budget estimates and eventually execute the improvements for you.
WANT TO LEARN MORE ABOUT THE AUSTIN MARKET?
Download our latest Austin Office Market Report to read exclusive insights from AQUILA brokers regarding Austin’s three primary submarkets.
How Local Leasing Brokers Can Help Source Commercial Real Estate Investment Properties in Austin, TX
Even if you don’t have a property in your sites yet, if you’re interested in entering or expanding your presence in the Austin market, it can be beneficial to engage a local leasing broker.
The broker can provide overall market analytics to help you better understand the Austin commercial real estate market.
And beyond that, if you provide the broker with a sense of what you’re looking for – core-plus office, redevelopment opportunities, etc. – then they can help you source new opportunities. Because the local broker is constantly in the market talking to landlords, tenants, developers and the like, they may have access to opportunities not being widely marketed. They may even be able to source creative opportunities that may never be formally marketed.
Leveraging the vast knowledge of a local expert clearly provides immense value throughout the purchase process. From helping understand the local market landscape, to providing underwriting assumptions, as well as sourcing potential commercial real estate investment opportunities, hiring a local broker helps you make the most informed decision possible. They will save you time and money while providing guidance you would not have access to otherwise.
To learn more about the Austin market, check out the Austin Resources section of our learning center.