In this episode, Gary continues the conversation about tools to help you understand your market as a commercial real estate agent. Understanding your market is key to maximizing the value of commercial real estate. In his discussion, Gary will cover demographic and economic information resources. People (demographics) and jobs (economy) are both very important tools when it comes to estimating the demand for commercial real estate. Remember, “real estate is space for people”. If you understand the impacts of the local demographic and the job market, you’ll make better decisions about commercial real estate.
When studying market demographics, economists and investors often use two main methods of dividing demographic regions: formal and functional. Formal geographies are identified by the government using counties, zip codes, census blocks, and metropolitan areas. Functional geographies are boundaries that you identify for yourself. For this discussion, Gary focuses on formal demographics to provide data.
When looking at census information, many economists reference Census Quickfacts as an efficient tool to gather data. Census Quickfacts acknowledges a large range of demographic information that is useful for investors and economists to analyze and evaluate. Gary uses this tool to address population growth within the counties of Polk, Osceola, and Lake. He notes that these counties alone have experienced population growth three times faster than the state of Florida. In itself, Florida’s population is growing ten times faster than the nation as a whole.
Economy & Labor
When studying the job market, Gary utilizes the Bureau of Labor Statistics’s “Economy at a Glance”. This tool provides an extensive list of national and local statistics within the labor force. Gary goes on to define the labor force as people who either have a job or are actively looking for a job. In Lakeland, this number stands at around 340,000 even though the total population stands at around 750,000. In Polk County, about 62% of the population is part of the labor force which is an all-time-high for the region. This is a huge indicator of a very strong market, ripe for investment.
Gary also utilizes the Quarterly Census of Employment & Wages (QCEW) to study employment within each region. He focuses on the North American Industrial Classification System (NAICS) to take a closer look at some important demographics within the region. Gary notes that in Polk County, there are 2.73 times more jobs in transportation and warehousing than than the national average.
If you want to make educated decisions within commercial real estate, it is important to understand both people and jobs. Don’t forget to watch Gary’s full breakdown of these data points and how to utilize the tools to study them in Episode 2 of “DataBreak with Gary Ralston”.
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U.S. Census Bureau:
U.S. Bureau of Labor Statistics: