Is Commercial Real Estate Too Expensive?
December 2021
Over the last year, commercial real estate prices have growth substantially with top markets across the U.S. seeing 20-30% appreciation for different asset classes.
Some investors feel that this growth is just too much to buy assets now, but for the most part, values are supported by improving performance metrics.
Aggressive growth from yesterday’s pricing does not mean that an asset is out of runway.
Investors should avoid the sunk cost fallacy and instead focus on financing terms, current and future cash flows, and eventual disposition price when making investment decisions.