CRE Research Ace Brendan Carroll Launches New Information Firm

BOSTON—In today’s official launch of a CRE research firm targeting metropolitan Boston, founder Brendan Carroll explains the aim of Encompass Real Estate Strategy is less about providing clients an unending sea of information flowing in the new millennium and more helping interpret that mass in an efficient and meaningful way. The 20-year industry veteran who has worked for some of the country’s leading CRE operations frets that the crush of metrics has become so prevalent as to foment a condition of “analysis paralysis” where ideas can be handcuffed at critical junctures through overthinking.

“The amount of big data out there because of the Internet can be as much a curse as a blessing, and so the core competency of Encompass is not in only providing numbers and statistics to our clients, it is in having a useful interpretation of what it all means for them and doing so in a timely manner,” he says, adding, “The goal is to create some really cool, unique tools which can help people understand the market and ultimately be able to make sophisticated decisions.”

Boston-based Encompass today is introducing Blue, its inaugural product assessing the regional office market, a survey that will be the firm’s flagship quarterly report for what Carroll is branding as a “spectrum of suites” to accommodate segments of the increasingly diverse commercial real estate world. With the Hub drawing global and local attention, Carroll anticipates clients not associated with major CRE shops will seek out his one-stop platform that in the first iteration delivers a far-reaching overview of the office market from the booming Back Bay, downtown and Seaport districts out to Routes 128 and Interstate 495. Similar to what he generated at various stops including Grubb & Ellis, Transwestern RBJ and Avison Young in a career begun in 1995, Carroll will offer submarket-specific reports collectively known as Slate in which a dozen office submarkets will be reviewed on a more enhanced assessment than in the Blue macro report, “expanding into market dynamics” in recognition of the vagaries present. Other “spectrum” products will drill down on everything from life sciences (Green) to industrial (Steel) and CRE sales (Chrome).

>> READ/DOWNLOAD ENCOMPASS BLUE HERE <

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Further, Encompass will twice yearly release Node, touted as Greater Boston’s only report focusing on the demand and inventory involving properties considered pedestrian friendly or transit-accessible, homage to the rising affinity for carless and LWP lifestyles. One snipet he offers: of the 13 million sf of office space absorbed since 2011 in metro Boston, over 50 percent of the volume involved assets that are within 10 minutes of a rail line, with Carroll observing that, “Today it is a transit-or-bust proposition if your company is targeting a certain demographic (millennials).” Given that, “If you are looking to lease space or if you are a landlord or investor, it is information we think can be very valuable.”

The opening series of Encompass reports will be available gratis to the universe. The firm is using a new texting service to provide the link with those wishing to get copies instructed to text to the number “228-28” and type in “encompasscre” in the message. They will then get a reply.

Landlords will be the primary client base for its research missives, says Carroll, painting a hypothetical scenario where an owner with a full floor of 25,000 sf empty would be well-served to know how much inventory is available compared to their property and what rental rate trends are in the given submarket. Tenants are seen as another source of business, especially bigger users seeking market trends they can use for their advantage. Commercial brokerage firms themselves could also utilize Encompass services, he says, as they look to complement their own in-house efforts or for those groups which have limited capacity in that regard.

Carroll acknowledges the normal trend regionally and nationally is for larger outfits to provide in-house research, with local offices such as Cushman & Wakefield, JLL and Transwestern each producing their own menu of reports for use by clients and sometimes for public consumption. Others commit fewer resources or have inexperienced research personnel in place, but at either end of the scale, Carroll says the intention is for Encompass to outperform its competition in “analysis innovations” which offer a fresh perspective others might not recognize. That was the hallmark of his tenure in Boston in the 13 years prior to going out on his own, most of that time spent running the Transwestern RBJ operation. “We didn’t do it once or twice, we consistently helped people look the information available from an entirely different perspective . . . and we will be offering that level of high-quality service at Encompass.”

In concert with Carroll’s track record is Robert Richards Jr., a founding member of the Richards Barry Joyce (RBJ) independent company that enjoyed a meteoric rise after being founded in 2001 before being bought by national powerhouse Transwestern in 2013. While stressing his satisfaction with the firm’s current research chief, Chase Bourdelaise, Richards recounts how Carroll immediately stepped into that role when RBJ was a fledgling operation and seeking to differentiate itself through greater service, with research always considered a priority.

“We could tell pretty quickly Brendan was going to meet all our goals of giving clients the kind of unique information that could be relevant in their business, but was not readily available,” Richards says, marveling both in the sheer amount of material delivered by one analyst up against many firms with entire teams dedicated to that purpose, as well as the way Carroll assesses the data. “Brendan was always amazingly prodigious and the information was consistently interesting and way beyond what everybody else was putting out,” Richards relays. “It certainly helped us as a young company to be able to offer that level of service to our clients.”

The first Encompass Blue survey, a copy of which was provided exclusively to therealreporter.com, covers over 206 million sf in metropolitan Boston with the space sliced into 32 different geographies. Opening quarter net absorption is 273,000 sf to the good, Encompass outlines, while over the past 12 months, the pace has been an astounding 3.67 million sf positive in that regard. The overall rental rate is $37.21 per sf, with hot spots the usual suspects of Back Bay ($61.21 per sf); the Seaport ($61.47) and downtown ($56.57 per sf). The vacancy rate trended down slightly by one basis point to 11.0 percent, a figure at its lowest level in 14 years, Encompass details.

Other items of note in the report: developers have 3.3 million sf of office space underway after adding 5.5 million sf since 2013; vacancy in Cambridge has dropped from 8.4 percent to 5.5 percent in just three quarters; and there are no Class A blocks larger than 20,000 sf in Kendall Square and for product that does exist, the average asking rent has skyrocketed to $77.50 per sf, highest of any submarket in New England.

As to his firm’s name, besides having a moniker that connotes guidance—complete with a compass comprising the “O” in the logo—Carroll says the firm “is so named because our real estate encompasses our people, our business strategies, our brand, our pride,” and observing that, “despite an increasingly online and virtual world, bricks and mortar locations are exploding in terms of connections to the successful execution of our business models.”

As fo his former colleague, Richards has salutations for Carroll in opining that “he has tremendous upside and a great understanding of the industry” and adding that while he was unware of the company’s formation, “I wish Brendon nothing but the best in his new endeavor.”