As we progress through 2024, commercial real estate shows a mixed landscape influenced by economic factors like inflation and labor market shifts.Office PropertiesThe office sector remains strained, with vacancy rates at a record high of 13.8% in July.

"Deep Pockets" Landlord - you need to buy those 50% inflated groceries for your family with less net income. 

In late 2019, the economy was slowing, and inflation was at bay, so the Fed began cutting at a similar pace to what the market is expecting in late 2024.

My experience with these auctions is they are normally slow and inefficient because the new owner had inflated price expectations.

@Spencer ColesIn short, the housing market dropped like a rock, I had a +$1.1 million dollar home that had plummeted, two over inflated sfr rentals and a commercial where house.  

You could alternatively hold the property for as long as is necessary to break even but when you consider the time value of money and how money today has a greater value than money in the future "breaking even" in a few years may actually be losing money because you've lost out on opportunities to do things with that money in the meantime as well as you've lost money to inflation. 

We're also able to evaluate our rates, and keep pace with inflation, on a monthly and quarterly basis because of shorter term leases.

Sometimes tenants want extra TI on new development than is standard so developer gets them to start out at inflated rent.

As you've mentioned, markets have experienced staggering increases, sometimes in the triple digits, due to natural disasters, inflation, and changes in the insurance industry.Adjusting ExpectationsIn my opinion, underwriting for 5-10% YOY increases seems much more aligned with the current environment.

However, California may not be the most favorable state for investment due to various reasons such as rent control, anti-landlord legislation, high costs, and high taxes.In this post, I will provide a straightforward process for selecting a city where:Rents outpace inflation: Inflation consistently erodes the purchasing power of a fixed amount of money.