Magazine readers are drawn to cover lines that contain numbers, the experts tell us. We've all stopped at the newsstand to read headlines such as "10 timely tips for better abs" or "Nine ways to a climb the corporate ladder."
The conventional wisdom, for reasons I don't fully understand, is that using odd numbers, not even numbers, is preferable. They supposedly linger in the readers' minds longer.
So, how in the world did we end up with 16 area reviews featured in this special issue of NREI? To steal a phrase voiced by Republican presidential candidate George W. Bush during his first debate with Vice President Al Gore, we are prone to "fuzzy math."
The truth is that publishing an annual compendium of reviews, with a heavy emphasis on charts and graphs spread across five property types, can be an unwieldy task. There are more than 50 charts contained in the ensuing pages. From the outset, our goal was to offer comprehensive coverage of both big and small markets and to try to achieve a geographic balance, from Los Angeles to New York and Omaha in between. Beyond those two criteria, there was no science to the site selection process. We identified some key markets and ran with the idea. Call it editorial license.
Tracking the numbers We've done our best to achieve uniformity in how we present the data in this issue to make it relatively easy for the reader to digest a massive amount of information relatively quickly. What we learned during this journey, however, is that within some property types - industrial for example - no two markets report their numbers exactly the same way, particularly when it comes to rents.
That's understandable because every market is unique. There are certain local and historical tendencies that come into play. But if the industry is committed to a higher level of standardization in how it reports and collects data, it still has a long way to go.
I'm beginning to wonder if standardization of data across so many markets is even possible, or preferable. Can you standardize an industry that in so many ways is fundamentally a local business? Does standardization somehow dilute the context of the information from a local point of view, or without it do we run the risk of comparing apples to oranges?
In the five years I've covered commercial real estate, I've grown accustomed to its vague terminology. It is not an exact science like medicine. Ask five brokers to define net or triple net, and you'll likely get five different answers, each delivered with an air of confidence. I'm still waiting for the definitive explanation on swap spreads as they pertain to the CMBS sector.
Note of thanks The old line in journalism is that you are only as good as your sources. We think we've worked with some top-notch sources in compiling this report. I want to thank the following companies that went the extra mile to provide us with solid market statistics: Marcus & Millichap (retail and multifamily); Cushman & Wakefield (office); CB Richard Ellis (industrial); and PKF Consulting (hotel).
I also want to thank our writers, the often forgotten mechanics, who did an excellent job of capturing the local flavor of these markets. They spent a lot of time chasing down sources. We think this product is one that we can build upon in the coming years, thanks largely to their efforts.
I'll talk with you again after the presidential election. In the meantime, I'm committed to avoiding the pitfalls of "fuzzy math" as we gear up for next year's Oct. 15 special edition.
Postscript: NREI name in the news Nancy Bistritz, our managing editor over the past year, has joined the Atlanta office of brokerage firm Julien J. Studley. Nancy was instrumental in piecing together this issue. We will miss her work ethic and no-nonsense attitude, and we wish her all the best.