“How’s the Real Estate Market?” is a question I’m asked frequently. I’m asked this in social situations, at business meetings, and by clients. The only truly accurate answer is “It Depends”. It depends on the type of real estate: office, industrial, flex, retail, or investment. The commercial real estate market is very segmented and inefficient so you really need to look at each individual project or property in relation to similar alternatives or competing properties.
One of the reasons this market has been difficult to navigate is that there has been a decrease in the number of transactions, especially on the sales side, and leasing transactions are not typically public knowledge. This leads to uncertainty in reading the market. Market decisions depend on criteria such as location, but these days more than ever, they depend on quality and value.
Value does not mean price. A building sold for $4.5 million five years ago doesn’t necessarily mean $2.7 million is a good deal for it today. And paying a higher price for a building today than it sold for five years ago may still be a good value. Value is driven by location, the utility of a property to its occupants, the quality of its tenants, features and quality of construction, and many other factors specific to a particular property.
To navigate this market successfully you must do your research and determine value in evaluating a lease, purchase, or sale. Utilizing a trained and experienced real estate broker with insight into a specific commercial real estate market is key to assuring that you are considering all the variables that impact value. This will steer you away from some of the problems we see in the news that are created by decisions based on price.
Dow Realty Market News & Transactions 
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