What is inventory?
A broad definition is that Inventory is the supply or stock of a certain commodity. In real estate, inventory refers to the amount of real estate that is on the market and is expressed depending on the market type.
For example, Office market inventory is the amount of available office space for sale or for lease and can be referred to in number of buildings or in surface area (square feet).
When compiling market reports, analysts generally count the completed properties inventory separately from properties that are under construction at the time of the reporting.
What is total existing inventory?
This sums up all existing (completed) and available (marketed as for lease or for sale) real estate of a specific property type, in a given market (location) at a given time.
What is shadow inventory?
This term refers to properties that exist but are not listed on the market. A few examples are:
o properties that are in foreclosure and have not been auctioned off or otherwise sold yet
o properties whose owners are delaying the sale, due to unfavorable market conditions (owners waiting for prices to increase, so it is a sort of inventory-in-waiting)
Shadow inventory has an effect on real estate market statistics, in that it leads to data understating the supply on a given market.
What is planned additional inventory?
This refers to the amount (number of buildings or total square footage) of a specific property type that is scheduled to become available (become part of the supply) in an upcoming forecast period. For example, when it is known that there are expansions, conversions (to the property type in question) and new construction projects underway, and their scheduled completion is during the fourth quarter of this year.
What is planned removed inventory?
This is the opposite of the planned additional inventory, though through the same elements – for example, it is known that 2 old office buildings totaling 150,000 square feet are to be demolished and one office building of 100,000 square feet is to be converted to retail space. This means a planned removed office market inventory of 250,000 square feet.
What is inventory management?
In real estate, this coincides with Property Management. Developers or real estate owners that have a sizeable inventory (own many properties) will generally employ a third party to manage that inventory. This can consist in property administration, maintenance and overseeing leasing of the property. It may be the case that separate parties handle each task, or that a brokerage firm that can handle leasing can also administer and maintain the property.
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