Today EDR Insight is excited to announce the release of the new Property Assessment Market Map, a project almost a year in the making and the first—and most comprehensive—data set ever compiled on the U.S. property assessment market. Our analytical approach is a demand-driven one, based on input from the lending sector as well as trusted sources of data in the commercial real estate sector. For the first time, the Property Assessment Market Map allows EDR Insight to monitor changes in the forces driving demand for Phase I environmental site assessments, property condition assessments—and eight other types of assessments (environmental and non-environmental). The model’s inputs are updated quarterly, beginning with a 4Q11 baseline.
We will now be publishing regular Quarterly Updates that highlight changes for the latest quarter and an updated forecast. A detailed description of EDR Insight’s methodology and assumptions is posted on our web page, and you’ll find the inaugural 1Q12 Quarterly Update here.
Highlights for the latest quarter include:
- Across all ten assessment types, there were more than 404,500 property assessments conducted in the U.S. in 1Q12, including 53,000 Phase I ESAs, 12,400 Phase II ESAs and 37,300 PCAs.
- Key barometers for the property assessment industry in 1Q12 were mixed, but positive overall.
- One of the strongest drivers in 1Q12 was loan refinancing as the $363 billion in this year’s maturities make their way through the system.
- The size of the U.S. property assessment market in 1Q12 was $668.2 million, with the Phase I ESA segment accounting for $133.1 million, or 20% of the market.
- The significant volume of capital now targeting U.S. commercial real estate suggests a moderately optimistic outlook for the U.S. property assessment market for the remainder of 2012, barring any unforeseen shock to the economy.
- EDR Insight’s 1Q12 survey results and interviews with industry insiders support that lenders, while increasing their allocations to commercial real estate, remain extremely averse to all types of risk, likely due to the mid-year market unrest of last year. As lending slowly increases, institutions are proceeding cautiously, which will likely keep activity strong for property assessments.
- Looking ahead over the near-term, the strongest opportunities for growth will lie in the transfer of assets in the 3 D’s: debt, distress and development.
Look for our next market map update in late August.
And thanks to all of you at EDR and in the field who provided your input in the development phase of the model.