Real Estate Forecast Algorithm

Project Description

Overview

We are a Commercial Real Estate firm that specializes in all areas of commercial property management.  The core services include sales, leasing and property management.  Accordingly, the two divisions in the business are:

1.     Sales and leasing – Sales and leasing of  new listings and therefore these properties do not relate to the firm’s managed properties.

2.     Property Management – We manage many properties on behalf of our clients, which from time to time become available for sale or lease.  

Accordingly, it is important to measure the sales and leasing revenue derived from non-managed properties as well as sales and leasing revenue from managed properties separately.  It is equally important to measure sales revenue and leasing revenue separately.  Accordingly, the four categories are:

Sales revenue non-managed properties

Leasing revenue non-managed properties

Sales revenue managed properties

Leasing revenue managed properties

The purpose of the algorithm is to use the historical data for the period 1 January 2016 to 30 June 2016 as set out in the  “input data” sheet  to provide a six months  forecast for the information defined in “Output report” sheet.   The next step is to forecast data for a twelve month period using the historical information for the previous twelve month.  Historical data for a twelve months period is required to achieve this.

Forecast data will be compared to actual data, to identifying any additional parameters which should be included in the algorithm to provide a more accurate forecast.    

 

Input Data 

Targets Pipeline 3 – are sale/lease targets which have been identified and could potentially move to Targets Pipeline 2 within 30 days.

Targets Pipeline 2 – are sale/lease targets where further progress has been made with the client and could potentially move to Targets Pipeline 1 within 90 days.

Targets Pipeline 1 – are sale/lease targets were we could potentially be requested by the client to prepare a submission to sell or lease within a 90 day period.

Submissions – a request to prepare a sale/lease submission for the client, which if accepted translates to an appointment to sell/lease a property.

Appointment – instruction from the client to sell/lease a property

Marketing Spend – advertising cost incurred by the client to sell/lease the property

Agency Work In Progress – estimated commission from the sale/lease appointments  

Property management Work In Progress – estimated commission from the sale/lease appointments of managed properties

Operator number of years’ experience

Probables – once negotiations commence for a sale/lease of a property estimated commission is tracked

Transaction (Revenue) – Sale/lease of a property has been finalised and commission becomes payable to GormanKelly for completing the transaction

The above information is available by number and $ value for each of the six Sales and Leasing Operators at the end of each month for a six month period.   

Algorithm

The algorithm is to forecast all the information for the next six month period as set out in the Output report sheet, based on the historical information in the Input data sheet for the previous six months.  

Output Reports

Report to include forecast of the monthly data for a six month period as set out in the “Output report” sheet.