How to Leverage Residential Development Data for CRE Site Selection

In commercial real estate (CRE), commercial site selection is crucial because “Location” is king—but “Audience” comes in a close second. A good location is a good location only if the people nearby need what you’re offering. Although in some cases new supply can actually create demand — a new Whole Foods in an area with relatively few grocery offerings might become especially popular because of its fresh products selection — most of the time, you need to make sure there’s an appetite for your project.

As a CRE professional, you must carefully weigh the demand in a given area when deciding where to build, lease, or develop.

Table of Contents

So, how do you accurately predict demand? One of the best ways is through residential development data. The people who live in and around your target area play a key role in determining which retail or commercial concepts will succeed. Whether you’re assessing a new location for a big-box retailer, a fast-food chain, or a boutique store, understanding demographics is essential. Let’s find out how residential data shapes retail opportunities—and how BuildCentral’s tools can help streamline the process.

Understanding Site Selection

Site selection is an important process in commercial real estate development, involving the identification and evaluation of potential development sites to determine their suitability for a specific project. This process is crucial as it directly impacts the project’s success, influencing factors such as accessibility, zoning regulations, and market demand. A thorough site selection process helps developers avoid costly mistakes and ensures that the chosen location aligns with the project’s goals and requirements. By meticulously analyzing each potential site, developers can make informed decisions that enhance the viability and profitability of their commercial real estate ventures.

Key Factors in Site Selection

When evaluating potential development sites, several key factors must be considered to ensure the project’s success:

  • Demographic Data: Understanding the demographics of the surrounding area, including population growth, income levels, and age distribution, is essential. This data helps developers gauge the demand for their project and tailor their offerings to meet the needs of the local population.

  • Market Analysis: Conducting a comprehensive market analysis provides insights into the supply and demand dynamics of the area. It helps developers understand the competitive landscape and identify opportunities for differentiation. If you’re a big-box retailer, depending on the location, you might specifically seek out — or avoid — expansive CRE developments which already house other big-box retailers.

  • Zoning Regulations: Ensuring that the site is zoned for the intended use is crucial. Zoning regulations can significantly impact the feasibility of a project, and non-compliance can lead to costly delays or even project cancellation. Similarly, upzoning practices to increase housing density and accommodate mixed-use developments can stimulate demand in a major way.

  • Accessibility: Evaluating the site’s accessibility, including its proximity to public transportation, major roads, and essential amenities, can influence the project’s attractiveness to potential tenants or customers. Another important consideration of accessibility beyond proximity is construction activity which might interfere with foot traffic to your location. Infrastructure+ users track planned infrastructure projects not only to find work, predict growth and uncover opportunities, but also to safeguard against disruptions to their own site’s operations.

  • Development Costs: Estimating development costs, including land acquisition, construction, and infrastructure expenses, is vital for determining the project’s financial feasibility. Accurate cost projections help developers plan their budgets and secure necessary funding. In many cases, backfills are preferable to entirely new developments because some sites come ready-made for particular kinds of tenants. Large facilities with cold storage, for example

By considering these factors, developers can make informed decisions that align with their strategic objectives and market conditions.

The Site Selection Process

The site selection process typically involves several critical steps to ensure the chosen location meets all project requirements:

  1. Identify Sites: Using geographic information systems (GIS) and other advanced tools like BuildCentral developers can identify potential development sites that meet their specific criteria. This step involves filtering sites based on factors such as location, size, and zoning regulations.

  2. Evaluate Sites: Each identified site is evaluated based on key factors, including demographic data, market analysis, zoning regulations, accessibility, and development costs. This comprehensive evaluation helps narrow down the most suitable options.

  3. Analyze Market Trends: Developers analyze current market trends, including supply and demand, to assess the project’s feasibility. Understanding market trends helps in predicting future demand and positioning the project effectively.

  4. Determine the Target Market: Identifying the target market for the project is crucial. Developers need to understand the target audience’s needs and preferences to tailor their offerings accordingly.

  5. Select the Right Location: Based on the evaluation and analysis, developers select the most suitable location for their project. This decision is informed by a thorough understanding of all relevant factors.

  6. Conduct a Site Visit: A site visit is conducted to verify the site’s condition and ensure it meets all requirements. This step helps in identifying any potential issues that may not be apparent in initial evaluations.

  7. Negotiate the Purchase: Finally, developers negotiate the purchase of the site, including the price and terms of the sale. Effective negotiation ensures that the acquisition aligns with the project’s budget and strategic goals.

By following these steps, developers can ensure they select the right location for their project, setting themselves up for success in the competitive commercial real estate market.

How Demographic Data Shape Commercial Opportunities

Understanding who lives where can make all the difference in CRE decisions. Different demographics support different types of businesses. Here are a few examples:

  • Food Deserts: Some communities, especially in low-income areas, lack access to fresh produce and grocery stores. Retailers that focus on essential goods, such as Dollar General or Aldi, often thrive in these spaces by meeting unmet needs.

  • Retail Distribution Based on Income and Age: Where a Starbucks or Container Store chooses to open reflects local purchasing power and consumer behavior. On the other hand, stores like Five Below or Big Lots target areas where budget-conscious customers are prevalent.

  • Zoning and Development Patterns: Single-family residential zones usually restrict what can be built around them—think small retail or convenience stores. In contrast, multifamily housing areas often feature mixed-use developments that combine ground-floor retail with residential units above. These spaces are ideal for cafes, fitness studios, and co-working spaces.

How Residential Data Can Drive CRE Professionals’ Site Selection

Hubexo offers a suite of tools to help you make informed, data-backed decisions. Here are ways our platform supports your site selection and strategic planning efforts:

Whether you are working on a residential or commercial development project, our tools provide the data you need to make informed decisions.

1. Map Existing Residential and Retail Developments

Get a comprehensive view of a market landscape. Our platform shows who lives where and identifies retail businesses that do well in similar demographics, helping you evaluate each potential development site. We help you see where competitors have set up shop—or where opportunities still remain.

Planned Retail Developments layered with the tapestry of that area

2. Filter Projects by Your Specifications

With BuildCentral, you can filter projects by criteria that matter to your business: location, size, amenities, parking availability, and accessibility. You can also consider foot traffic to make informed site selection decisions, enhancing customer accessibility and driving profitability. This saves time by narrowing down the most relevant development leads and site opportunities.

BuildCentral let’s you track developments based on value

3. Conduct Market Analysis of Planned Development Pipelines

See what’s coming next. BuildCentral’s planned development data lets you track where new housing or commercial projects are in the pipeline, helping you predict future demand and position yourself ahead of the competition. BuildCentral’s planned development data is an essential tool for real estate site selection, helping you predict future demand and position yourself ahead of the competition.

BuildCentral let’s you track developments at any stage of the pipeline

4. Identify Market Leaders and Key Players

Our platform identifies top builders, developers, and retail chains by project type and region. You’ll know which companies are leading the market—and which trends they’re betting on. Knowing which companies are leading the market can help your site selection team make more informed decisions.

BuildCentral segments builders, developers, and retail chains by project type and region

5. Track Company Activity and Relationships

Find valuable partnerships. Maybe you notice several developments using the same consultant or contractor. BuildCentral helps you track working relationships, giving you potential leads or partners for your own projects. Understanding the target audience for each development can help you identify potential leads or partners for your own projects.

BuildCentral tracks working relationships

6. Contact Decision-Makers Directly

Save time by connecting with the right people. Our data includes decision-maker contact information, so you can skip the gatekeepers and build the relationships that matter most for your project.

BuildCentral platform includes decision-maker contact information

Maximize Your Commercial Real Estate Site Selection Strategy with BuildCentral

Leveraging residential data isn’t just about knowing where people live—it’s about predicting what they’ll want and need next. With BuildCentral’s tools, you’ll have access to real-time insights that help you target the right areas, optimize site selection, and stay ahead of your competitors.

Ready to see BuildCentral in action? Request a demo today and learn how our data can transform your CRE strategy.

Want to stay ahead of industry trends? Sign up for our newsletters and quarterly Market Vision reports to get the latest insights delivered straight to your inbox.