How to do an Effective Commercial Real Estate Research in just 30 minutes!

Warning: Smoking Kills! 

How do you generally go about doing an office or commercial real estate consumption research? How do you find occupancy levels, trends, rentals and stuff of an office building or an office block? There are the usual techniques of desk research, telephone conversations with the office building management and even the physical recce to ascertain your assumptions.

But all of those methods are slow, hazy and sometimes unreliable. Plus, the real estate scenario is a very dynamic one, so old data can be fatal for your research.

At IREFD, one of our constant quests is to simplify real estate and one sure shot way of doing that is to get our real estate related researches, spot on. This post shall show you one such technique to get a feel of how commercial spaces are working.

# The Story of Technopolis, Kolkata.

Technopolis is one of Kolkata's landmarks. It is a permanent stamp on the evolution of office spaces in East India. Once home to great corporate brands like HSBC, First Source and others, occupancy levels, we heard were falling over the last two years or so. We needed to know what was happening. Read on.

# All good things begin with a cup of tea

We drive to Sector V, Salt Lake and at the edge of this tech city, find Technopolis. We get off the car and head straight to the tea shop for some chai. Someone approaches and asks for a pack of Benson & Hedges - Lights. The following conversation happens;

Customer: Why don't any of the shops here have Benson & Hedges Lights?
Shopkeeper: Sir, a few years back, I used to sell 5 cartons of Benson Lights everyday. That means 50 packets. And 5 to 6 cartons of India Kings as well. Now, the situation is such that I got a pack of Benson Lights three months ago, had it on the shelf for a month and no one bought it. I returned it to the supplier.

Customer: What are you saying? 5 cartons of Benson Gold Blue a day?
Shopkeeper: Yes sir. We can tell the grade of an employee by the brand of cigarette he smokes. You go to these shanty food shops all around Technopolis and they cannot tell you the difference. It is the same food. You come to the cigarette shop and we can tell you by the cigarette consumption pattern about what is really happening inside that big, opaque office building right in front (pointing towards Technopolis).

Customer: So what do you think is the issue here?
Shopkeeper: The rent here is the big issue. Up a little ahead in New Town, and even in some other buildings around this place, per square foot rentals are half of what they are in Technopolis. Do you think big companies are fools that they will burn away money in rent which they could otherwise save?

That was the moment of awakening we wanted to share with all of you. When doing commercial/ office real estate consumption and trend researches, head straight to the tea and cigarette shanty and chat up with the guy. It works! And it works better than a lot of processes that involve calling someone who knows someone who you might think has the answer to your question.

We spent an extra half hour at the shop and asked him some pretty direct questions ourselves. We came away with rough per square feet rentals for office spaces, occupancy levels, successful and failed commercial buildings, per square feet selling rates and a few phone numbers of experienced local brokers who could give us a whole lot of other office space information, over the phone!

Guess what? Our research dudes took 3 weeks to churn out a report that matched the one we got over a 30 minute conversation with the cigarette shop owner. And, it was an 80 percent match. Not bad eh?

Note: Smoking Kills