Rob Millman, CCIM Licensed in Indiana

About Rob Millman

Rob Millman, CCIM Associate Broker with Prudential Indiana Realty has been invloved in sales and marketing for over 22 years and involved in real estate marketing for 14 years. Rob is a graduate of Vincennes University with an A.S. Degree and Purdue University with a B.S. Degree with an emphasis on Agricultural Economics. Rob began his career in residential real estate and progressed over time to work in the area of commercial sales and acquisitions. He has completed over 600 real estate transactions. Rob has a strong work ethic and a passion to assist those who choose to work with him developing and cementing many long-term relationships. His mantra of providing "Spectacular Customer Service" is noted by those who have established a relationship with him.







Thursday, December 8, 2011

Book Overview: "A Field Guide to Commercial Real Estate Evaluation"

Location, Location, Location!!!  We all have heard this old adage for decades upon decades, however in today’s complex retail environment there are many more factors to consider than only location.  In this article, I would like to share with you some information found in Dr. Richard M. Fenker’s book, The Site Book also known as “A Field Guide to Commercial Real Estate Evaluation”.  Dr. Fenker contends the following factors are critical when considering a site: site features, demographics, customer knowledge, competition, market knowledge and physical characteristics of the trade area.  

He purports when considering the basic principles, site evaluation is a science not an art suggesting analysis must be objective and measured using scientific tools to make intelligent estimates of future potential.  He describes in-depth in his book eight key principles.  The first is the notion site evaluation is science, secondly, you must know the behavior of your customers to determine traffic patterns and demographic attributes. The third denominator is “predicting sales is not the same as evaluating site quality.” His fourth principle is understanding that “evaluating risk and estimating site quality are different problems.”  He continues, “You can have a site of average quality with very high risk because of a few specific factors such as very high (or no) competition, poor visibility, or poor strategic position.”  His fifth principle is “objectivity in real estate depends on context.”  In a nutshell, parties have differing opinions for liking or disliking a site.  Dr. Fenker writes, “Objective knowledge about the features that determine the success of a retail location is the heart of an effective evaluation strategy regardless of the perspective.  Strategic decisions are strengthened when complemented by a comprehensive understanding of the factors that determine site quality.”  Principle Six: “Site quality is an enduring, not momentary concept.”  He believes good locations or site quality possess enduring features that will stand the test of time and most likely will not change.  Principle Seven is very simply to invest your money wisely upfront with an intelligent site analysis process as dog sites are very expensive mistakes.  And finally, principle eight is “develop a good process and good results will follow.”  His contention is short term sales are rarely a trustworthy indicator of location quality adding there are many factors other than real estate quality that determines sales and factors vary greatly from market to market.

Dr. Fenker’s book is published by Mesa House publishing and provided a good in-depth discussion of major areas affecting site evaluation, including customer sources, usage patterns, demographics, drop-in features, image, trade area, growth strategies, competition and cannibalism.  I recommend it as a good read for investors to better grasp factors beyond yield and capitalization rates to consider when purchasing retail properties.