WE TURN PUBLIC RECORDS INTO MORE USEFUL, DETAILED INFORMATION TO SOLVE TODAY'S BUSINESS CHALLENGES.
We have all the information that can be gleaned from local tax assessors, including site addresses, owner names, and owner addresses. Additionally, we have building square footage and age, lot size, date of purchase and amount paid, and structural details. From county recorders, we have information such as mortgage amounts and dates, lender names, and notices of default. Data from satellite images provide building footprint square footage and the geo-centroid of the main building. We also have SMR’s Building Quality & Condition Score.
We offer risk analytics that include risk scores for mortgage default, insurance claims, and new buyers. These scores provide a comprehensive view of potential risks associated with properties.
Our enhanced data includes detailed information on how buildings are being used, covering more than 200 categories such as restaurants, apartment buildings, industrial sites, stores, and farms. We also have tenant data, owner contact names, building names, and property valuations.
The Enhanced Commercial Property Database covers virtually all commercial real estate in the U.S., making it an exceptionally comprehensive resource. In comparison, another well-known vendor of commercial data only covers about half the buildings for which we have data.
Our proprietary Tenants Database reveals which firms are located at millions of U.S. commercial buildings and often includes how long these firms have been in business, a key indicator of stability. Notably, a top competitor in furnishing tax assessor data lacks any tenant information.
The Enhanced Commercial Property Database is, to our knowledge, the only source that provides risk scores for each U.S. commercial property. If you make loans, offer insurance, or engage in other business with commercial property owners, these risk scores are essential information.
We construct the Enhanced Commercial Property Database from over 200 data sources, far surpassing the two or three sources used by others. This ensures a richer and more detailed dataset.
Data from satellite images include a building's footprint/rooftop square footage, as well as the latitude and longitude of the center of the building. This supplements the latitude/longitude derived from the address, providing more precise location information.
Other sources for commercial property information primarily focus on buying, selling, and leasing. The Enhanced Commercial Property Database can be used similarly, but it also includes additional applications for risk and marketing. We offer risk scores, owner contact names, and a Tenants Database containing nearly 21 million records, often with tenant contacts. Furthermore, we can tailor bulk data orders to meet your specific needs.
Tax assessors provide information on property ownership but not on who is actually present at a location. Our Enhanced Commercial Property Database addresses this gap by adding more than 14 million building tenant/occupant names from our proprietary Tenants Database. Furthermore, we often know and report how long these tenants have been in business, which is a key indicator of rent-paying stability.
Local tax assessors often describe properties using vague terms like "general commercial" or "tax exempt." This leaves uncertainty about the actual use of these properties. Is it a dry cleaner, an office building, or a factory? Using tenant data and owner information, we clarify many unknown building uses and correct instances where the local assessor has over-generalized or erred.
Understanding credit risk is crucial for commercial real estate lenders, insurance companies, and potential buyers. For lenders, knowing about credit risk helps in making informed lending decisions. Insurance companies can use credit risk scores to see if there's a correlation between credit risk and claims. Buyers can assess property-based risks, such as a history of loan defaults indicating potential problems. Our database provides three different credit risk scores, derived from multiple regression statistical models. For more details, refer to the section on Commercial Property Risk Scores.
Tax assessors sometimes fail to report building square footage or only report it for one building on a multi-building property. Our database uses a predictive model to estimate square footage when this information is missing or incomplete, ensuring you have a comprehensive understanding of the property size.
Commercial properties often span multiple real estate parcels, which public records report separately. The Enhanced Property Database identifies these multi-parcel properties for you. For lenders, we identify parcels that serve as collateral for the same mortgage loan made to the same owner. For other users, we identify parcels at the same mailing address owned by the same owner. For building-oriented users, we identify parcels with the same address, regardless of owner. Using identifying numbers, you can group multi-parcel properties and examine the entire property comprehensively.
Finding the right person to contact for a building can be challenging when public records only list the owner, often a corporation or LLC. Our database adds human contact names for more than 7 million properties, helping you address letters or make phone calls to the appropriate individuals.
Determining the real worth of a commercial property usually requires a full appraisal, which is both expensive and time-consuming. For a quicker estimate, tax assessors sometimes report a property's market value. When this is not available, they might only report the assessed value, often lower than the market value. We adjust these assessed values to estimated market values by comparing them to recent sales in the same vicinity. Our database furnishes a property value based on either the reported market value or our adjusted assessed value.
Raw data do not indicate whether a commercial property is owner-occupied or owned by absentee landlords, yet this information is important for various applications. We provide an owner-occupancy flag for each record to clarify this.
Public property records often lack the names by which buildings are commonly known. For instance, a very large office building at 350 5th Avenue in New York is known as the Empire State Building, but public records may not reflect this. Our database includes building names for more than 2 million properties, sourced from a proprietary database built from over 100 sources. In the Enhanced Commercial Property Database, you will see names like the Empire State Building and many other marquee and smaller buildings.
At the end of 2022, the average U.S. commercial building was about 53 years old (53.68 years).
This finding is a slight increase over prior years. When we looked at building age in 2011, and in 2014, and again in 2017, the average was almost exactly 50 years old. But beginning in 2018 the average age began to increase.
So, new buildings pop up, while all others get older – and the net result had been no real change in average age. In the last four years though, the percentage of older buildings has crept up.
Chain drug stores (Walgreens, Rite-Aid, etc.) had the lowest average age in our analysis at 24 years.
This underscores the rapid recent spread of chain drug stores; good news for them, not so much for the independent drug stores these chains are gradually replacing.
At the other end of the spectrum, our two categories for mixed-use buildings had averages of 70 and 82 years. This means the average mixed-use building was built all the way back in 1940's.
By “mixed use,” we mean single buildings that have stores and apartments above them, for example.
The more recently constructed buildings by type also included the commercial condo buildings now so familiar in so many places.
Both commercial/industrial condos and commercial office condos had an average age below 37 years.
As one might guess, the oldest buildings also include boarding houses, cemeteries (they often do have buildings on them), and museums and libraries. At an average age of 70 years, bars and taverns are rather old as well.
Airports are not generally new — but the buildings on airport property often are, with an average age of only 32 years. More in tune with the common wisdom, medical office buildings (a huge category) also are relatively new.
Building Age Data breaks down the average age by building type.
The average market value of a U.S. commercial building was $1.5 million at the end of 2022, up from $1.27 million when we did similar research in 2014.
If $1.5 million seems surprisingly low to you, it may be due to what comes rapidly to mind when you think of a “commercial building.” You may think of a landmark like the Empire State Building.
But the more typical commercial building is like the dozens you pass on your morning commute — most of them small and unremarkable. For every Empire State Building, there are thousands of local gas stations, beauty parlors, karate dojos, convenience stores, and small shops. Indeed, the $1.4 million figure is a mean average. A median (midpoint) value would be lower.
These conclusions flow from a study of market values of 9.5 million U.S. commercial buildings where values were available to us. The values do include land value. All 9.5 million properties had a combined value of $14.3 trillion, an impressive number.
What is the actual split between modest and expensive buildings in terms of quantity?
Of the 9.5 million buildings, fully 9 million were worth $5 million or less. The other 497,484 had a value of more than $5 million.
Looking at aggregate total values, California tops the list with New York as a close second. This is a change from 2020, when New York was slightly ahead of California. Commercial buildings in California had a total value of $3.1 trillion at the end of 2022, or 22% of the value of all U.S. commercial buildings.
New York is not far behind at $1.7 trillion. Back in 2017 it was California in the lead, as it is now.
Rounding out the top three states with more than $1 trillion is Texas, with close to $1.1 trillion in aggregate total value for commercial properties.
We get estimated building market values in two ways.
First, some of the nation’s tax assessors report what they believe to be a building’s market value. You can argue with the accuracy of tax assessor numbers, but in the aggregate, they aren’t too bad.
Second, some tax assessors report only an “assessed” value for a property, which is often below market value and set merely for taxation millage purposes. When we get a tax assessor “assessed” value and no market value, we compare the assessed values to recent sale prices in the same vicinity and adjust the assessed values up to estimated market value.
Property Values By State provides further details.
If our credit risk scores are as good as we claim, then we must have some idea about the number of U.S. commercial buildings in dire jeopardy, right?
Some will have commercial mortgages in grave danger of default.
Some will be risky for new buyers based merely on location and building characteristics.
And some are likely to be nightmares for property-casualty insurers, because financial risk correlates with claims.
So, how many? Risk Score Distribution provides details.
As of December, 2022, we counted 12,080 properties that had commercial mortgages with default risk scores above 500 (meaning five times or greater than the norm likelihood to default on the loans).
We also counted 9,444 properties with extremely high inherent risk for new buyers, and 18,516 with very high claims risk for insurers based on financial stress.
Of course, most commercial properties are relatively risk-free, otherwise the whole national economy would be in deep trouble.
As the data show, a very large majority of properties have risk scores below 100 in every category. The 100 score is our national norm level of risk. Millions have risk scores below 25 – and thank goodness they do.
All three of our risk scores are intended to rank-order properties by risk.
Because we get a monthly updated flow of mortgage notices-of-default, meaning very high delinquency, we are able to test and refine our scoring models at any time.
Founded in 1984, SMR is a producer of real estate data, predictive models and scores, and industry research on home loans, commercial buildings and loans, and credit risk subjects.
Most of the nation's largest banks and non-bank lenders have been clients for SMR's research publications. These have often forecast key near-future events. A 2003 SMR mortgage study was subtitled: "The Housing Bubble Is Real." SMR studies in 2004 and 2005 forecast sharply rising loan defaults and a likely foreclosure crisis.
In the credit risk arena, SMR has acted as consultant to the American Bankers Association on bankruptcy subjects. SMR also was the primary research firm on behalf of the coalition that fought for bankruptcy law reform, successfully passed in 2005.
In 2011, SMR first offered basic commercial real estate data for sale under the name Commercial Building Inventory (CBI).
That name has now been replaced by Enhanced Commercial Property Database (ECPD), reflecting a multi-source approach: all of the basic public records data plus tenant information, risk scores and analytics, and dozens of additional enhancements.
