How to Benchmark Competitor Properties in CRE
Want to measure how your commercial real estate (CRE) properties stack up against competitors? Benchmarking is the key. It involves comparing performance metrics like rental income, occupancy rates, and net operating income (NOI) to identify strengths, weaknesses, and opportunities.
Key Takeaways:
Identify Competitors: Use tools like market reports, customer feedback, and mapping software to find direct, indirect, and substitute competitors.
Choose Comparable Properties: Focus on similar location, property type, size, and tenant demographics for accurate comparisons.
Track Metrics: Measure occupancy rates, rent levels, NOI, operating expenses, and tenant turnover to evaluate performance.
Leverage Technology: Platforms like CoreCast simplify benchmarking with real-time data, AI analysis, and visual tools.
By following a structured approach, you can refine your strategy, improve property performance, and make data-driven decisions.
How to Find and Select Competitor Properties
Finding CRE Competitors
To identify competitor properties, think about them in three categories: direct, indirect, and substitute competitors. These distinctions depend on tenant needs and market overlap. Start with industry reports, trade publications, and CRE conferences to get a sense of active players. Customer feedback can also be a goldmine for uncovering who your competitors are. Don’t forget to check online searches and social media platforms to see how competitors are positioning themselves and engaging with their audience.
Another effective way to spot competitors is by diving into historical project data. By analyzing past development trends, you can pinpoint key players targeting similar property types and markets. Mapping tools that combine construction data with demographic overlays are also incredibly useful for visualizing competitor activity in different submarkets.
"Real estate is inherently a location-based business...it is critical to dissect the principal components of value and make relevant, scaled adjustments as each component has a different impact on value." - Ben Witten, Real Estate Strategy | Product Strategy | Location Intelligence | Data Analytics | Site Selection
Here’s a practical example to bring this to life: BuildCentral’s research highlights how big-box retailers like Target often move into former Kmart locations. Why? Both need large floor spaces, cold storage, and accessible suburban sites. This demonstrates how understanding operational needs can help you identify less obvious competitors, like substitutes in the same market.
Once you’ve identified potential competitors, the next step is refining your list using clear selection criteria.
Selection Criteria for Competitor Properties
After identifying competitors, evaluate them using specific factors to ensure meaningful comparisons. Start with geographic location - properties in the same submarket or neighborhood provide the most accurate benchmarks. Even minor geographic differences can significantly affect rental rates, vacancy levels, and overall performance.
Next, align property types and uses. Comparing across asset classes can lead to misleading conclusions. For instance, as of Q3 2024, cap rates varied widely: multifamily (6.10%), industrial (7.60%), office (8.90%), and retail (7.00%). Always match apples to apples.
Other key factors include size, age, and condition. Properties that differ significantly in these areas can distort your analysis. For example, specialized properties like medical office buildings typically command different rents compared to traditional office spaces.
Don’t overlook physical and environmental factors like traffic flow, access to transportation, utilities, and nearby amenities. These elements can greatly influence property performance. Benchmarking is much more reliable when these attributes are similar across the properties you’re comparing.
Lastly, consider tenant demographics and lease structures. Look for properties that attract similar tenant profiles and have comparable lease terms - such as lease duration, escalation clauses, and tenant improvement allowances. This ensures your analysis reflects the realities of the market and yields actionable insights.
Key Metrics for Property Benchmarking
Performance Metrics to Track
Tracking the right metrics is the backbone of effective property benchmarking. One important indicator is occupancy rates, which reflect both market demand and property performance by showing the percentage of rented or used space compared to the total available space. For example, vacancy rates vary significantly across asset classes: multifamily properties had a 6.3% vacancy rate, retail spaces remained at 10.4%, industrial properties were at 7.0%, while office spaces hit a record-high vacancy rate of 20.4% in Q4 2024.
Another key metric is asking and effective rents (factoring in concessions), which provide insights into competitive positioning. As of Q1 2025, national multifamily asking rents averaged $1,926, while effective rents were slightly lower at $1,830. Comparing a property's rental growth rate to these averages can help uncover opportunities for repositioning.
Net Operating Income (NOI) is another critical measure, offering a clear snapshot of profitability by subtracting operating expenses from income before accounting for debt service and taxes. Similarly, the Operating Expense Ratio (OER) - which compares operating expenses to gross operating income - is an essential indicator of efficiency. An ideal OER typically falls below 80%, and benchmarking this figure can highlight areas for operational improvement.
Capitalization rates (cap rates) are used to assess expected returns on real estate investments, helping to evaluate property values based on income generation. Additionally, monitoring lease renewal rates and tenant turnover is vital. High renewal rates often signal satisfied tenants and strong management, while high turnover can indicate potential issues. Metrics like market absorption rates and days on market provide further insight into how quickly properties lease or sell, reflecting the overall market demand.
Together, these metrics form the foundation for meaningful comparisons, enabling property managers and investors to develop strategies that enhance competitiveness.
Using Tables for Metric Comparison
Tables are a practical way to organize benchmarking data, turning complex information into actionable insights. By setting up comparison tables where competitor properties are listed as columns and key metrics as rows, you can quickly spot performance gaps and identify market leaders.
An effective benchmarking table might include financial details like NOI, rental rates per square foot, operating expense ratios, and cap rates. It should also cover operational data such as occupancy rates, average lease terms, tenant turnover percentages, and lease renewal rates. Adding market context - like construction costs per square foot, absorption rates, and days on market - provides even more depth.
For tracking trends, consider creating separate tables for different time frames. A year-over-year comparison can highlight shifts in market share, while quarterly tables may uncover seasonal patterns. When presenting rental data, breaking it down further - such as by unit type or space category (e.g., Class A, B, and C office spaces, or anchor tenant vs. inline shop rents in retail) - can reveal more specific competitive advantages.
To make these tables even more actionable, you can use heat maps or color codes. For instance, green could indicate above-market performance, yellow for average, and red for below-market metrics. This visual approach allows you to quickly identify areas where improvements are needed or where a property is excelling.
Step-by-Step Benchmarking Process
Data Collection and Normalization
The backbone of successful benchmarking lies in gathering accurate and consistent data from various sources. Start by cataloging all your data sources to determine what information is available, where it’s stored, and how it’s shared. This ensures you’re working with complete and reliable data, avoiding gaps that could skew results.
Your data should come from both internal and external sources. Internal records might include lease agreements, financial reports, and operational data, while external sources could involve market surveys, industry databases, and stakeholder interviews. A solid lease administration system is critical for providing the detailed space and cost data needed for benchmarking. Tools like Geographic Information Systems (GIS) can simplify this process by centralizing data and offering advanced analysis capabilities.
Standardizing your data is just as important as collecting it. Without consistent formats and units, comparing properties becomes a challenge, leading to errors and delays in decision-making. Create unified templates and structures to ensure all metrics align, and use consistent units for comparisons.
"Consistent use of a standard process for classifying work and recording progress is key to any benchmarking system." - Rick Deans, Executive Vice President of Industry Engagement, InEight
Whenever possible, automate data collection and validation to minimize errors and maintain consistency. Once your data is normalized, you’ll have a solid foundation for uncovering trends and identifying performance gaps.
Analyzing Trends and Gaps
With standardized data in hand, the next step is to analyze trends and pinpoint areas for improvement. Start by comparing your property's performance to industry benchmarks. This will highlight strengths, weaknesses, and opportunities to refine your strategies.
Focus on key metrics like net operating income (NOI), maintenance costs, and energy efficiency. For example, compare your property's NOI to similar properties in the same market to spot potential growth areas. Metrics like revenue per square foot and operating expenses per square foot can also reveal underperformance when measured against market standards.
Real-world examples underscore the value of this approach. One investor identified a $5 per square foot revenue gap and adjusted their leasing strategies accordingly. In another case, an industrial property consuming 20% more energy than comparable buildings underwent upgrades like LED lighting and HVAC optimization, reducing costs and improving tenant satisfaction.
Analyzing trends shouldn’t stop at current performance. Tracking historical data and adapting to market changes ensures benchmarks remain relevant. For example, evolving tenant expectations might reveal gaps in amenities or services that need attention. Predictive analytics can further enhance this process by forecasting risks and opportunities based on emerging trends.
Patterns across multiple metrics can provide deeper insights. For instance, one property owner noticed an 85% occupancy rate but low lease renewals. After surveying tenants, they upgraded common areas and introduced flexible lease options, boosting retention by 15% within a year.
Using Results for Planning
Once you’ve identified trends and gaps, the next step is turning these insights into actionable plans. Benchmarking isn’t just about spotting problems - it’s about driving meaningful improvements. Use your findings to refine operations and guide investment strategies.
Understanding how your property stacks up against competitors allows you to prioritize high-impact upgrades. Modernize outdated systems, adjust lease structures, and align your marketing strategies with comparative data to maximize revenue. Monitoring renewal rates alongside new lease rates can also uncover opportunities to enhance returns.
Consider this example: an investor managing an office building with rising expenses and stagnant rents adjusted lease terms and cut unnecessary costs. The result? A 12% increase in NOI within a year. This demonstrates how benchmarking can directly influence financial performance and operational efficiency.
Regular performance reviews should incorporate updated benchmarking data to keep targets aligned with market trends. Investing in tools and expertise for data-driven insights not only sharpens decision-making but also supports long-term planning. In fact, top-performing commercial real estate investors are four times more likely to benchmark their assets regularly, highlighting the competitive edge that systematic benchmarking provides.
Using Technology for CRE Benchmarking
Technology Benefits in CRE Benchmarking
Modern technology has reshaped the way commercial real estate (CRE) benchmarking is done, making data collection faster and improving accuracy. Tools like real-time data collection and advanced analytics have replaced tedious manual processes, freeing up teams to focus on strategic decisions rather than sifting through data.
The real estate industry has embraced this tech-driven shift in a big way. Back in 2019, global proptech investment hit an impressive $6.3 billion across 382 deals, showing strong confidence in digital solutions. These advancements have led to platforms that can process data on property performance, energy use, and even tenant behavior patterns.
Artificial intelligence (AI) and machine learning are game-changers here, handling massive datasets to deliver insights and predictions that would be impossible to achieve manually. Meanwhile, Internet of Things (IoT) devices provide a steady stream of real-time operational data, offering a detailed view of how properties perform and stack up against competitors.
Visual tools and automation are another huge win, cutting the time spent on data collection and review by up to 50%. This means quicker identification of opportunities and risks. Companies that rely on advanced metrics see a 20% higher growth rate compared to those that don’t. These developments make collaboration smoother and analysis faster.
"Investors don't just want end-of-month reports anymore. They want dashboards updated hourly." - Alex Jaffe, Senior Director, Valuation & Advisory at Altus Group
Cloud-based solutions have also transformed teamwork. A 2024 survey found that 67% of property managers using cloud services improved their operational speed by at least 30%. These systems unify data access for all team members, cutting down on miscommunication.
Geographic analysis and mapping are other areas where technology shines. Organizations using geographic information systems (GIS) have seen a 20% boost in the accuracy of location-based decisions. This helps identify critical factors like market clusters, transportation links, and demographic trends that impact property performance. Predictive models are also making a big difference, improving rental yield forecasting accuracy by 25% when compared to manual methods.
With these technological tools, platforms like CoreCast simplify benchmarking processes, making them more efficient and actionable.
How CoreCast Simplifies Benchmarking
CoreCast takes the complexity out of property benchmarking by offering an all-in-one real estate intelligence platform. By combining real-time analytics, AI automation, and advanced data mapping, CoreCast makes benchmarking easier and more effective.
The platform integrates features like mapping, portfolio analysis, pipeline tracking, and customized reporting into a single system. Its property mapping tool offers a clear visual of competitive landscapes, allowing users to compare properties and assess market positioning at a glance.
Portfolio analysis is another key feature, enabling users to benchmark properties against both their own portfolio and broader market standards. This dual approach highlights internal optimization opportunities while revealing external competitive gaps, making it relevant for various asset types and risk profiles.
Pipeline tracking links benchmarking insights directly to deal management, so users can monitor properties through different stages of a deal while keeping an eye on market data and competitive intelligence. This ensures that acquisitions and investment strategies are always informed by up-to-date benchmarking insights.
Customizable reports make stakeholder communication a breeze. These reports automatically compile benchmarking results into professional presentations tailored to different audiences. Whether it’s high-level market insights for investors or detailed metrics for operations teams, the reports save time and ensure consistency.
CoreCast also centralizes communication and data sharing through its key stakeholder center. This feature eliminates version control issues and ensures everyone - from internal teams to external partners - has access to the same insights.
The platform integrates seamlessly with third-party systems, automating data collection from multiple sources. While it works alongside property management systems, CoreCast focuses on intelligence and analysis, excelling at benchmarking without overlapping with day-to-day operational tasks.
Real-time insights keep data fresh and actionable, helping teams stay on top of market trends and make faster decisions.
"If you don't look forward, you're flying blind." - Bill Maher, Director, Strategy & Research at RCLCO Fund Advisors
Looking ahead, AI-driven automation will continue to reduce manual work, ensuring that competitive analysis stays accurate and instantly useful.
Transform Real Estate Data into Confident Decisions
Join Corecast to streamline your real estate operations, gain real-time insights, and make smarter investment decisions with a unified platform.
Conclusion
Benchmarking competitor properties is a cornerstone of long-term success in commercial real estate. By identifying strengths and weaknesses, it enables teams to allocate resources where they can make the biggest impact, paving the way for targeted improvements and measurable growth. It also helps establish realistic financial goals and provides a roadmap for achieving sustainable progress.
The insights gained from benchmarking drive critical decisions - whether it's fine-tuning rental rates, lowering operating costs, or determining the best timing for property upgrades. As Kimberly Gangi from Insero Advisors, LLC, highlights:
"Benchmarking allows you to pinpoint areas where your property outperforms competitors and areas where improvement is needed, so you can focus resources on areas with the greatest potential for enhancement". – Kimberly Gangi, Insero Advisors
Beyond operational adjustments, benchmarking plays a key role in asset valuation, offering brokers and borrowers a clear understanding of how an asset compares within the broader market. Rob Finlay, Founder and CEO of Thirty Capital, describes it well:
"Benchmarks are both a ruler and a compass that equip commercial mortgage originators and their clients with tools to navigate murky market conditions". – Rob Finlay, Founder & CEO of Thirty Capital
Accuracy in benchmarking cannot be overstated. According to KPMG's 2023 Global Construction Survey, 37% of respondents reported projects missing budget and schedule performance targets by 20% or more due to poor risk management. This underscores the importance of precise, real-time data to mitigate risks and make informed decisions.
Technology is reshaping how benchmarking is done. Platforms like CoreCast are revolutionizing the process by centralizing data, automating analysis, and delivering real-time insights. With over 80% of CRE firms expressing confidence that data analytics will enhance their investment decisions and operational efficiency, the adoption of integrated technology is rapidly gaining momentum. These tools simplify the benchmarking process while amplifying its value, making it easier for firms to act on insights.
As Kendall Pretzer, CEO of Grace Hill, puts it:
"Benchmarking provides key insight into the most crucial areas for improvement by property, allowing for specific, measurable action plans". – Kendall Pretzer, CEO of Grace Hill
FAQs
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To simplify benchmarking for commercial real estate properties, consider using real estate intelligence platforms. These tools bring together essential data points such as occupancy rates, rental trends, and market insights in one place. They can automate data collection, offer real-time analytics, and make property comparisons much more efficient.
Platforms with features like integrated mapping, portfolio analysis, and pipeline tracking provide a comprehensive view of your property's performance compared to competitors. This approach not only streamlines the process but also supports smarter, data-driven decision-making while cutting down on time spent on manual tasks.
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Key Metrics for Benchmarking Competitor Properties in Commercial Real Estate
When evaluating competitor properties in the commercial real estate sector, it’s essential to focus on specific performance indicators that reveal market position and investment potential. Here are the most important ones:
Occupancy rates: This metric shows how much tenant demand a property has, giving insight into its overall performance.
Rent levels: Comparing rental prices helps determine how competitive a property is in the current market.
Market trends: Staying aware of economic and industry shifts can highlight factors that might influence a property’s future performance.
Cap rates and price per square foot: These figures help assess a property’s valuation and its attractiveness as an investment.
Net operating income (NOI): A critical measure of profitability that reflects the financial health of a property.
Tenant retention: High retention rates indicate a property’s ability to maintain long-term tenants, which is a strong sign of stability.
By analyzing these metrics, you can gain a clearer picture of a property’s strengths and weaknesses, make smarter investment decisions, and maintain a competitive edge in the market.
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When choosing properties for benchmarking, it's crucial to focus on factors that ensure a fair comparison. Start with location proximity, property size, and tenant demographics. Beyond that, take into account the property's age, condition, layout, and the amenities it offers - these details can make or break the alignment between properties.
Rely on the most current market data, like recent sales or leasing trends, and adjust for any differences between the properties you're analyzing. This method helps you create comparisons that are both accurate and insightful.