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The
Retail Market Feasibility Study
| The first
question every new Rainmaker client asks is, "why do we need a
market feasibility study?" The answer lies in the way in
which we go about deciding whether a given investment opportunity is
deserving of funding support. The person who does this is the
underwriter. The underwriter's job is to investigate the various
issues surrounding a loan request (or equity float, as the case may be)
to determine whether the risks to investment loss are outweighed by the
potential economic gains. The underwriter only gets into real
trouble by accepting the risks for a given transaction and then that
transaction becomes a non-performing asset. So... the
underwriter only gets into trouble by saying "yes"; therefore,
"no" is the starting position (i.e.: "prove to me that I
should say something other than "no"). The underwriter
will exercise "all due diligence" regarding the underwriting
process requirements for investment approval. The term, "all
due diligence," is a legal term and it means that no stone should
be left unturned - you only walk on the pebbles.
The underwriter knows the business will be developed, constructed
and operated within the market capitalism envelope where the winners and
losers are picked by the consumer, so it helps to know:
- What attributes of the project are being mirrored by the
market?
- What relative revenues will the project likely be able to
generate?
- What services, amenities and project physical configurations
will the market require the project to provide?
Very simple questions. The market feasibility study created
for the retail marketplace will provide the following answers that are
interpreted in terms of the key questions:
- Revenues (sales/s.f., sales by retailer, leasing rates, CAM
rates, gross sales participation rents)
- Traffic counts (indicators that can be used to compare the
relative sales of different locations for the purposes of creating
statistically-significant tenant sales levels)
- Absorption (indicators of sales saturation levels and lease-up
of spaces)
- Store size (based upon peer-group sales/s.f.)
- Tenant improvement allowances (indicators of costs of leasing
the project)
- Retail groups (ranking of retail segments for the purposes of
creating the leasing information packages)
- Services and amenities (what consumers may require in terms of
common areas, services, amenities and related project development
items)
The answers to these questions are played out through the
feasibility process and result in the capital funding plan that is used
to solicit lender participation in the developer's project. |
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Rainmaker Marketing
Corporation is here to help. Call today for a free consultation and
get the answers to your questions from a Rainmaker consultant.
Company Profile
Rainmaker Marketing Corporation is a consulting firm that
focuses on providing the due diligence services on a business to business (B2B)
basis. Rainmaker Marketing Corporation can trace its roots back to the
late '80's and was formerly incorporated in 1994.
Over the years, Rainmaker Marketing Corporation
consultants have completed hundreds of assignments across the United States (43
states) and offshore. The completion of RMC's work directly lead to over
$1.5 billion in successful project outcomes.
Take a few minutes and learn more about RMC. This
website is designed to provide a wealth of planning information pertaining to
the capitalization, operations, and organizational program tenets today's savvy
entrepreneurial company must embrace for continued growth and success...
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