OSPAR provides research services for clients across North America. The nature of requests varies greatly. Sometimes an assignment is a simple question which requires a short data search. Many consulting assignments require interviews with "players" in the industry and research in cities halfway across the continent.
When faced with consulting questions which require computer models, the ability to answer such questions necessitates not only (1) an understanding of the industry, but also (2) access to the requisite data, and (3) an ability to "picture how things work".
Once we understand the relationship between variables, then it is a matter of designing a model to mimic those inter-relationships. The model is then back-tested with historical data to determine how good a "fit" the model is to the real world. If the model produces statistically valid results on tests with historical variables, then current and forecast variables are input into the model to produce the forecast.
Strategic planning, risk management, goal setting, performance measurement, and adjunct matters are greatly enhanced with research. With appropriate research, both systematic and non-systematic risk are greatly reduced. Research has provided important management tools such as diversification models, market studies, portfolio risk rating, loan loss forecasts, etc..
An example of such research is the office market absorption forecast described below.
Market Research: Real Estate Forecasts
The Dynamics of Real Estate
The continuing cycle of crashes and recoveries of Canadian real estate markets demonstrates that the benefits of analytical research far outweigh the cost of those services. OSPAR Consulting's office market forecast warned of the impending correction to the Toronto real estate market. At time when the office vacancy was still 8% and money was still pouring into real estate related investments, this market forecast showed that office vacancy would hit 18%! This forecast was based on an empirically tested absorption model which has been proven accurate in multiple North American markets. This risk management tool has forecast both upward and downward market corrections. With such predictability, investments provide greater returns with less risk, and the entire efficient frontier of the portfolio is shifted. Change becomes an opportunity rather than a portfolio-threatening event.
The above "office market forecast" link is to an article by Ian Marcil, principal of OSPAR Consulting, which explains how the absorption model forewarns investors of market corrections.
The cost/benefit of research provides very high returns. The real estate related losses of the late eighties are in the billions of dollars. The cost of research services which would prevent or mitigate those losses is less than the amount of the dollar rounding on financial statements. It would be extremely beneficial to invest a fraction of the amount that is spent to create value on research which will secure and preserve that value.
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