Our process begins where it happens: the marketplace. We build the most complete market profile through exhaustive primary research. This information is viewed through the concept of the Effective Market Area (EMA), which identifies the smallest area from which a project is likely to draw the most significant amount of support. We also establish a 100% Database from all development within each project’s EMA. We then fine-tune our primary research with the highest-quality, most recent and relevant secondary research for maximum validity.
The 100% Database and Other Research Methodologies
Every study conducted by Danter and Associates is based on one simple methodological principle: The 100% Database. We believe that the only way to determine market strength is to examine the market at every level, so we gather data on all market area properties, not just “selected” properties that are “comparable.” A report based on selected comparables can determine how the market is performing at one price or quality level: the 100% Database determines how the market is performing at all price and quality levels, allowing our analysts to make recommendations that maximize potential support and give the subject property the best opportunity to perform within the overall continuum of housing within the market.
From the 100% Database methodology, we have developed significant research methodologies specific to real estate market feasibility analysis. Because we gather rent and amenity data for all market area properties, we can empirically analyze the relationship between rent/price and level of quality/service. For our multifamily market studies, we have developed a proprietary rating system which allows us to determine a project’s Comparability Rating, which includes separate ratings for unit amenities, project amenities, and aesthetic amenities/curbside appeal. By plotting the rents and comparability ratings for an area’s properties on a scatter graph, we can use regression analysis to determine market-driven rent at any comparability rating level.
The 100% Database also allows us to measure the depth of market support. Our research indicates that most of the support for a new multifamily development typically comes from other apartment renters already within the Effective Market Area. Our previous research has identified the amount of money that renters will typically step-up their rent for a new apartment option that they perceive to be a value within the market. By analyzing this base of step-up support, we can quantify the depth of support for new product within the market, as well as offer constructive recommendations to maximize absorption potential.
Proprietary Research and Analytical Support
Once our analysts have obtained the 100% Database in a market area for their project, this information is added to our primary Database on that development type. Our apartment Database alone, for example, contains information on over 12 million units across the US. Data on housing units, condominiums, resorts, offices, and motels is available for recall. In addition, analysts are regularly assigned to update this material in major metropolitan markets. Currently, we have apartment information on 75% of the cities with populations of 250,000 or more. This includes rents, vacancies, year opened, amenities, and quality evaluation.
In addition to our existing database by unit type, we also maintain a significant database of proprietary research conducted by The Danter Company over the last 25+ years.
These data, provided to our project directors as background information for their recommendations, are collected as ongoing proprietary research due to their cost—which is usually prohibitively high for developers on a per-study basis. Several different surveys have been conducted, among which are the following:
- Apartment Mobility/Demographic Characteristics
- Tax Credit Multifamily
- Rural Development Tenant Profile
- Older Adult Housing Surveys
- Office Tenant Profiles
- Downtown Resident Surveys
- Shopping Habits
- Health-Care Office and Consumer Surveys
Every project surveyed by Danter and Associates analysts is photographed for inclusion in our photographic Database. This Database provides a statistical justification of our findings and a visual representation of the entire market. It is used to train our field analysts to evaluate the aesthetic ratings of projects in the field, and for demonstration purposes when consulting with clients. These extensive Databases, combined with our other ongoing research, allow Danter and Associates to develop criteria for present and future development alternatives, and provide our analysts background data to help determine both short and long-range potential for any development type.