Page 54 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

families in an area; size of those entities; median income; age; ethnic
makeup; and so on.
A professional demographer will analyze an area by drawing three
rings on a map of the property and its market. The rings are drawn at
a one - mile, three - mile, and fi ve - mile radius around the property.
As an owner, you should know the demographic makeup within
each of these rings. A restaurant owner may have a great chef, the
best food, and award - winning d é cor, but if the right consumers for his
food are not found within that three - mile ring, he ’ s looking at a real
uphill climb.
An apartment owner might have an option to buy a Class B prop-
erty for a great price. The property is in good repair and the numbers

look fine. But if the income level has dropped for residents within that
three - mile radius, that ’ s probably the reason why the price is so
attractive. That property will be harder — not impossible, but much
harder — to fill. Because 80 percent of apartment tenants come from

within a three - mile radius of the property, this sudden income shift
may now mean that they cannot afford your B rents.
Apartments will not be the only commercial properties affected by
this lower income. The area may no longer be able to support higher -
end retail and restaurants. As leases come due, Target stores may be
replaced by Dollar stores. This is a sign that the economics are wors-

ening and you are definitely not on the path of progress . Values will
suffer.

Traffi c Count

All commercial properties are concerned with traffic count. How many

potential customers are going by every day? How many eyeballs will
see the property signage? Different types of retail stores need different

minimum traffic counts to be successful, unless they have a large com-
ponent of Internet sales, or they are particularly good at marketing.
Very few are.

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