Ed's Mid-term / Final Exam study notes

Market Analysis is used by developers, users, investors, brokers, financial analysts, and government officials.

• A developer needs to determine the present and future demand of a particular type of real estate. Thus, developers are interested in rent level s, absorption, construction costs, undeserved markets (or gaps), and the cost of capital in order to determine when to develop, where to develop, and whether to develop at all.
• Users are driven by cost reduction. In order to decide whether to buy, build, or rent; users need to determine, and compare, purchase prices, construction and land costs, and current market rents. In addition, users who rent want to know what the lease terms are (6 months minimum or 12 months minimum), what they must pay for (water, trash, electricity, gas, covered parking, etc.), and what the up-front fees are (deposits, pet fees, administration fees, application fees, etc.)
• Investors would like to pay no more for property than they need to. Thus, investors need to know the market rents, market expenses, market vacancy levels, etc. Returns, WACC, and cap rates are also derived from market analysis.
• Brokers represent customers and, thus, need to know the most up-to-date market information available in order to get the best “deal” for their customers.
• Financial Analysts need to determine the risk associated with a market. Thus, financial analysts need to know the characteristics of the marketplace, such as the diversification of the labor force and industries, the growth patterns of the marketplace, and the current rates of return.
• Government officials use market analysis to forecast future market conditions in order to anticipate and plan for future infrastructure and staffing.
• The markets for space and the capital markets are related via V = (NOI) / (Cap Rate) . The construction market and the asset market are interrelated. When the property asset value rise above the construction costs, developers have an incentive to build. When values fall below costs, buildings tend to depreciate.

A market feasibility study is conducted to determine if:

• There is a demand for a certain type of real estate;
• There is enough supply of a particular type of real estate to meet demand;
• What type of capital markets and political conditions are faced by that particular type of real estate in that particular region; and
• If not enough supply is available to meet the current demand, whether there might be a profit in adding supply.

A market analysis is the overall process of determining whether the market will support a particular type of real estate at a particular site so that it is profitable. Market feasibility is general whereas market analysis is more localized.

Where can I use GIS in market analysis?

• GIS can be use d in market analysis to help with spatial inquiries (distances), help discern spatial patterns of market characteristics, show trends of spatial patterns, determine proximity analysis (distance relationships), and trade areas (boundaries of local markets to be analyzed).

What are the types of GIS ?

• The ArcGIS suite is available in three license levels: ArcReader, ArcView, ArcEditor, and ArcInfo. ArcInfo is the highest level and provides all available options.

What components come with each product?

• Each product comes with ArcMap, ArcCatalog, and ArcToolBox.

What does each component do?

• ArcMap: The application used to view and edit geographic data, analyze spatial data (to find and understand relationships among geographic features), and create maps, graphs, and reports.
• ArcCatalog: The application used to browse, find, preview (data and attributes), organize, distribute, manage, and document your GIS data. It is similar to Microsoft Windows Explorer but is designed for viewing geographic databases, maps, and metadata.
• ArcToolBox: the application used to access, organize, and collect geo- processing tools, models, and scripts. The tools are categorized by tasks, for example, all data management tools are grouped together, all the conversion tools are grouped, and all modeling tools are grouped.
• ArcReader : The application that allows one to view, print, navigate, and reduce/enlarge digital maps.
• ArcView: The application that allows one to create maps and map data, query data, analyze spatial relationships, and overlay layers.
• ArcEditor: The application that builds on ArcView functionality with more data creating and editing tools, including simu ltaneous editing by more than one user (versioning), and offline editing.
• ArcInfo: The application that builds on ArcEditor functionality with more spatial analysis tools in addition to ArcWorkstation.

What are the features of databases?

• Homogeneous groups of features are called feature “classes”. Feature classes may be groups of POINT features (point feature class), groups of LINE features (line feature class), groups of POLYGON features (polygon feature class), etc. For example, a shapefile is a single feature class. Cities may be represented by a POINT feature class. Geodatabases are sets of feature classes.

What are the basic components of GIS data (direction, adjacency, and connectivity) …shape and location of features and corresponding attributes.

• Features: point, line, polygon
• Model features either with vector or raster.
• Attribute data: characteristics are in nominal, ordinal, inte rval / ratio

Map scales

• If we think of the map scale ratio as a fraction (1:50 = 1/50), then a larger denominator is equivalent to a smaller fraction and hence a smaller map (i.e., 1:50 means that items on the map are 50 times smaller than they actually are)

Metadata

• Metadata is descriptive data about the data itself. For example, the reference coordinate system, a data dictionary, etc.

Fully understand what each feature class will and will not allow.

Understand what are the requirements for nominal, ordinal, and interval ratio data (symbology).

What are the sources of GIS data?

• Universities
• City planning commissions
• (find more sources from handout packets)

What do we need for geo-coding?

• We need a reference map and addresses.

Coordinate systems must the same if proximity analysis is to be done.

• Two types of coordinate systems
• Spherical, aka geographic, coordinate system
• Cartesian coordinate system

Any map projection involves choices of:

• Datum
• Scale Reduction
• Projection

All maps have distortion

• Shape
• Area (size)
• Distance
• Direction

You can preserve one or two at the expense of other distortions.

• Conformal projections: shape
• Equal-area projections: area
• Equal-distance projections: distance between certain points
• True-direction (azimuthal) projections: direction

Every thematic map needs its own data layer.

The output of an overlay is the shape with the smallest dimension.

Make sure to understand the following for the FINAL EXAM:

• Understand how GIS enhances the market analysis, market feasibility, and site analysis.
• How to use GIS to organize and modify data.
• How to do spatial analysis.
• How is GIS different from regular mapping programs?
• How do you model geography features (points, lines, and polygons)?
• Data concepts --> feature classes, etc.
• Map scale, data frame, map document, spatial reference, metadata, source file, template file, topologies, projections, datum, geo-database vs. feature data sets vs. feature class.
• Be familiar with attribute tables including how to choose a common ID (attribute) among tables.
• Map distortion and other properties…what is the trade-off between them
• Terms for editing maps such as nodes, arcs, vertex, edge, tolerances.
• Data quality measurements
• What are the operators OR, AND…what would be the results of their use.
• Know geo-coding…what data do we need and what is the outcome.
• Know geo-processing…what data do we need and what is the outcome…union, intersect.
• Where can Union and Intersect be used (line and polygon).
• Classification classes…natural breaks, quartile, geometric, etc. Make sure you understand what each means.
• How to convert x,y coordinates into a map….must be in decimal point system.
• Understand Join and Relate concepts (One-to-One, One-to-Many, Many-to-One relationships)
• We may have to critique a map and explain what it is missing, how to present it in a better light, and explain our decisions.