How Lease Comps Can Help You Master CRE Market Dynamics

Commercial real estate (CRE) lenders face a variety of challenges on the job—from evaluating new deals to managing portfolios and ensuring property valuations are accurate. The key to solving these challenges lies in having access to the right data and tools.

That’s where lease comps come in. Lease comps reveal critical information about market activity, tenant demand, and rent trends. In this installment of CRE Market Movers, we’ll dive into the data, highlight which markets have the most lease comps, and provide a practical guide for how you can use Blooma and CompStak together to make smarter, faster lending decisions.

What Markets Have the Most Lease Comps?

When it comes to identifying active, high-demand markets, lease comps offer invaluable insights. Based on CompStak data, over the past year (Q2 2023–Q3 2024), Los Angeles–Orange–Inland Empire led the nation in lease comps for industrial properties over 10,000 square feet. This isn’t surprising—this region is home to the largest industrial market in the U.S., fueled by the bustling ports of Los Angeles and Long Beach.

Here’s how the top eight markets stack up in total lease comps:

1. Los Angeles–Orange–Inland Empire
2. Chicago Metro
3. Atlanta
4. Dallas–Ft. Worth
5. New Jersey–North and Central
6. Houston
7. Phoenix
8. Philadelphia–Central PA–DE–South NJ

The story is similar for bulk industrial leases (transactions over 100,000 square feet). Los Angeles dominates again, thanks to its robust construction of large-scale industrial properties and consistently high tenant demand.

Why Lease Comps Matter

Lease comps aren’t just numbers—they’re the foundation for understanding market dynamics and making informed decisions. By analyzing lease comp data, CRE professionals can:

• Evaluate Market Health: High lease activity signals strong tenant demand and upward pressure on rents, while fewer comps may indicate oversupply and downward pressure.
• Project Rental Income: Lease comps provide benchmarks for estimating rental income, which is key for assessing cash flow and property valuation.
• Mitigate Risk: By identifying trends like declining rents or high vacancies, lease comps help lenders adjust strategies to minimize exposure in weak markets.

For example, a market like Los Angeles–Orange–Inland Empire, with its high lease comp volume, suggests strong demand and stable rent growth potential, making it attractive for investment. Conversely, markets with fewer comps, such as Phoenix, may warrant closer scrutiny to assess oversupply risks.

How to Use Blooma and CompStak to Solve On-the-Job Challenges

Understanding lease comps is just the first step. To turn these insights into actionable strategies, you need the right tools. Blooma and CompStak work together seamlessly to help you solve key challenges you encounter on the job. Here’s how:

Challenge 1: Evaluating New Deals

You’re considering a new industrial property in Dallas–Ft. Worth. How do you know if it’s priced right or if the market is stable?

• Step 1: Use CompStak to search for lease comps in the area. Look at rental rates, tenant demand, and lease terms to benchmark the property against the market.
• Step 2: Automate cash flow analysis and valuation. Blooma utilizes a market-based income approach, leveraging Compstak lease comps for revenue, calculates NOI, and applies a market cap rate to determine the projected market valuation.

💡 Pro Tip: Compare the property’s rental income to market averages from CompStak to spot undervalued opportunities or red flags.

Challenge 2: Managing Your Portfolio

Your portfolio includes properties across multiple markets, and you need to identify which assets might require repositioning or refinancing.

• Step 1: Use CompStak to monitor lease trends in key markets. Identify areas with declining lease activity or softening rental rates.
• Step 2: Upload the property’s financials into Blooma. The platform enables users to compare the current cash flow alongside market projections, helping to identify properties that may experience declining NOI or rising vacancy rates

💡 Pro Tip: Use Blooma’s risk alerts to prioritize which properties need immediate attention.

Challenge 3: Ensuring Accurate Valuations

You're preparing to underwrite a loan, and you need to confirm the supportable loan amount based on the property's value.

• Step 1: Combine CompStak’s lease comps with Blooma’s valuation tools. Use the Market Income Approach to project rental revenue based on current lease trends.
• Step 2: Use Blooma’s Sales Comparison Approach to validate whether the property’s sales price aligns with market comps.

💡 Pro Tip: Align both valuation methods to ensure confidence in your underwriting decisions.

Why Blooma and CompStak Are Better Together

Blooma and CompStak offer a powerful combination of tools that simplify the CRE decision-making process. Here’s how they complement each other:

• CompStak provides real-time market data, including lease and sale comps, property data, and analytics to help you understand tenant demand, market trends, and property performance.
• Blooma automates financial analysis and valuation, combining this data with P&L insights and proforma modeling to streamline your workflow.

Together, they empower you to make smarter, faster decisions—whether you’re evaluating deals, managing portfolios, or preparing valuations.

Gain Confidence in Your Decisions

Lease comps provide a window into market dynamics, helping CRE professionals like you solve everyday challenges. By combining the granular market insights from CompStak with the automated analysis tools in Blooma, you can tackle these challenges with confidence and precision.