Market analysis methodology.

Competitive set construction is the analytical discipline of identifying which competing properties are relevant to the subject and documenting the inclusion criteria. The discipline matters because a comp set that's too narrow misses competitive supply; a comp set that's too broad dilutes the analytical signal. Each asset class has prescribed conventions or industry standards that govern comp set construction.

Hotel comp sets follow STR-defined methodology — STR pulls competitive set composition from market data plus operator and analyst input. STR Global subscriptions provide occupancy, ADR, and RevPAR data at competitive set level with monthly frequency and 5-year history. Multifamily comp sets follow NCHMA Model Content Standards (September 2025 update) for affordable and LIHTC, prescribing primary submarket composition, occupancy verification, unit mix and amenity matrix alignment, and documented inclusion criteria. Self-storage comp sets are facility-by-facility verification within the trade area, with operator visits, occupancy verification through trade area calls, and amenity matrix comparison.

Senior housing comp sets follow NCHMA-aligned methodology with care-level segmentation (independent, assisted, memory care, skilled). Industrial comp sets segment by clear height, dock door count, and tenant profile (single-tenant net lease versus multi-tenant). Medical office and ASC comp sets segment by hospital affiliation and procedure mix. Retail comp sets follow tenant-mix and trade-area methodology with anchor tenant credit profile addressed explicitly. Data center comp sets are primarily benchmarking-driven (PUE, power density, fiber density) rather than tenant-driven. The comp set construction rules for each asset class appear in the relevant asset pillar.

Supply pipeline analysis identifies competing properties that will deliver during the subject's lease-up or absorption period. The analytical work covers properties currently under construction (with anticipated delivery dates), properties planned (with entitlement status and capital commitment), and properties speculative (with site control but not yet entitled). Each category carries different probability of actual delivery; the pipeline analysis weights deliveries by completion probability rather than treating all planned properties as equivalent.

Pipeline impact on absorption depends on competitive overlap. A 200-unit multifamily property delivering in the same submarket during the subject's lease-up reduces the subject's capture rate proportionally if the products are direct substitutes. Pipeline analysis must address whether competing deliveries are genuine substitutes (similar AMI band for affordable, similar unit mix and amenity profile for market-rate) or differentiated product (different rent band, different demographic target). The bankable framework's pipeline methodology models competitive overlap explicitly rather than treating all pipeline as equivalent threat.

Capture rate methodology is the analytical bridge from demand quantification to absorption forecasting. NCHMA Model Content Standards (September 2025 update) prescribe explicit capture rate methodology for affordable and LIHTC at the income-band level — demand from substandard housing, overcrowded households, and cost-burdened renter households must be quantified with documented source. Market-rate multifamily capture rate methodology is less prescriptive but follows analogous logic — total demand at the rent band divided by total supply (existing + pipeline) at the rent band.

Absorption forecasting projects the lease-up timeline or sales velocity through stabilization. The forecast addresses base case (most likely delivery and absorption), slow-up scenario (delayed absorption with extended marketing period), and adverse scenario (competitive pipeline impact, market downturn, or tenant departure). The bankable framework's absorption methodology is conservative — base case assumes typical market conditions; slow-up and adverse scenarios test the deal's resilience to operating volatility.

NCHMA Model Content Standards prescribe market study format and methodology for affordable and tax-credit multifamily and senior housing deals. State housing finance agencies and LIHTC equity investors require NCHMA-aligned market study; agency multifamily (Freddie TAH, Fannie LIHTC) increasingly aligns to NCHMA expectations. The September 2025 update tightened documentation density on capture rate methodology, demand modeling for income-restricted bands, and absorption forecasting under slow-up scenarios.

Comp set construction under NCHMA standards requires primary submarket composition (typically 5–10 mile or commute-shed-based primary catchment), occupancy verification through documented operator contact, unit mix and amenity matrix alignment, rent comparable verification, and explicit inclusion criteria. The September 2025 update tightened the operator contact documentation expectation — analyst representations must specify date of contact, contact method (phone, email, on-site), and contact verification (whether the operator confirmed the data or whether data came from secondary sources).

Demand modeling at the income-band level is the most consequential NCHMA Model Content Standards element for affordable and LIHTC deals. The methodology quantifies demand from substandard housing (typically defined as inadequate plumbing, kitchen facilities, or substandard structural condition), overcrowded households (more than 1.0 person per room), and cost-burdened renter households (paying more than 30 percent of income on rent). Each demand component carries documented source — typically U.S. Census ACS for substandard and overcrowded; Census ACS plus state housing finance agency data for cost-burdened. The bankable framework's NCHMA-aligned scope reflects post-September 2025 documentation density across all relevant components.