At worst they're inflating the value of the property and pocketing a nice chunk of change right up front.

Commercial is always based on location.If a Wal-Mart, Lowes, Home Depot, Target, etc come into town you can bet that the value of the land is going to go up.The improvements to the property will go up with inflation because the cost of a 2x4 goes up so the cost to build or rebuild the improvement will go up because of this.Now when an area runs out of land that can be developed then the prices of land in that area sky rocket if it's desirable land.

Has inflation ever hit this economy so hard?

Use what ever calculations you choose for your criteria, but keep in mind that there are many claculations & considerations to observe before moving forward on any deal.It is true that sellers and particularly seller's agents, will make the numbers look as good as possible, attempting to hide or leave out expenses and inflate the gross incomes.

Lauderdale which was the posterchild for over inflated home prices last year.

It was originally 15k, but I inflated it because my end buyer wanted to wrap the birddog fees into it.

In inflation adjusted terms, they will be lower.Now, if there are specific local drivers, the story may be different.

Ajusting for inflation, I would say it will cost less.

Runaway inflation can eat away at even the largest fortunes.

But diversify.TIPs are also great, since we may be heading for some some real inflation.