Are you wanting to get into the real estate game but don't know any of the lingo? Parse through this plethora of lessons where you will learn the meaning and specific application of dozens of real estate terms taught by the incredibly successful Michael Burer.
Featured Coaching Excerpt - Notes & Transcript, Part 1
Submarket: A segment or portion of a larger geographic market defined and identified on the basis of one or more attributes that distinguish it from other submarkets or locations.
Lesson Nugget: Understanding what submarket a building exists in will allow you to appropriately determine the true value of that property by comparing it to other buildings in that area.
submarket term taught like codeacademy, searching for alternatives to lynda.com?
-All right, thrivers. Coast to coast. Around the world. On different planets. People tuning in from space stations to watch this program, Thrive15.com, one of the alternatives to lynda.com . We want to first off thank you for being here. But I also want to let you know we are here with Michael there's-no-real-estate-topic-too-obscure Burer in sunny San Diego, to talk about something controversial, called submarkets. Now, I'm going to go ahead and read the definition. And then he's going to provide us some clarity, some descriptive narrative, some examples, that my mind can handle. So here we go.
"A submarket. A segment or portion of a larger geographic market defined and identified on the basis of one or more attributes that distinguish it from other submarkets or locations." What does that mean?
-So when you're talking about the market for a building, you may first start big picture, in the city that it's in. But then you want to zero in and talk about a more finite geographical area where that building is located. So if it's a building downtown-- maybe it's not just the broader whole city, but it's the downtown market. It could be other clusters. Usually there's something unique-- maybe some freeways or something that defines a certain area of that submarket.
-In San Diego-- let's give an example-- there's the Gaslamp district. And then what's another district in San Diego?
-So in the office market, there would be University Town Center, there could be the downtown market, could be Del Mar.
-OK. So let's just throw out three right now. You have the Gaslamp district, the University Center district, and then Del Mar. When does a submarket end? How do you know-- I mean, is there rules for this, or what do you mean?
-There's not really always bright line demarcations, but they are generally understood. That in this area or this pocket is some particular submarket. And usually a broker, or somebody who's knowledgeable about the real estate in that market, can help you understand, hey, where's my building located? What submarket is this in? And then that allows you to compare the building against good comps, comps that are most like your building.
-In your situation, where you're the CFO of a billion-dollar real estate, I mean, $1 billion. Billion. That's not $1,000. That's not $1 million. And that's not $10 million. That's not $20 million. That's $1 billion. When do you actually talk about submarkets on a daily basis or weekly basis? When does this topic come up?
-Well, right, in real estate, location, location, location. So understanding the submarket where your building is located, it may be great to say, hey, my building is in San Francisco, a very hot real estate market. But you want to understand where in San Francisco your building is, in particular. And is that particular submarket-- what are the attributes of that submarket-- the demand drivers, the things that make that location either a good place to invest real estate or a place that maybe would be more challenging.
-As you know, I often-- William Shakespeare says that brevity is the soul of wit. To which I say, bah. I say, the length of my description for my appreciation is the soul of my wit.
And so in the face of William Shakespeare, I want to share something with you. See if you can follow my logic.
MICHAEL: Let's see.
-You are on fire. If you are on fire, you're heating up the Earth's atmosphere. If you are, in fact, heating up the Earth's atmosphere, you, my friend, are responsible for the rising of the sea levels. And, thus, I blame you. As I show my appreciation for you.