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Essay / Research Paper Abstract
This 10 page paper provides an overview of financial considerations in respect to the commercial real estate market. Valuation is discussed in depth and many issues are broached such as finding an appropriate site and securing adequate financing. Bibliography lists 12 sources.
Page Count:
10 pages (~225 words per page)
File: RT13_SA148fin.rtf
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Unformatted sample text from the term paper:
discussed in the context of financial valuation. Many issues are broached including recommendations on finding an appropriate site and securing adequate financing. The importance of the economy is also
discussed along with specific methods of valuation. Value theory and appraisal mathematics are included along with a detailed account of CAPM. Each method is explored in terms of when it
is best used. Commercial real estate is differentiated from residential real estate as discussed in each category. The space market, cash flow and asset values are each addressed as concerns
and deciding whether or not a particular site is viable is also discussed. Commercial real estate is something that must be evaluated as any
other business. However, commercial real estate is something that is more prone to peculiar twists and turns than say, residential real estate. The residential market is something that does not
necessarily behave according to the economic climate. In bad times, people try to hold on to their homes and not sell them. Commercial properties on the other hand will have
a tough time sustaining itself and owners may therefore want to sell. Todays commercial real estate market is difficult to predict as
the economy goes through a variety of twists and turns. Analysts suggest that losses in commercial real estate portfolios are likely to increase, and there is more risk in the
sector than perhaps a decade ago (Agosta, 2001). This is in part due to stricter lending standards, higher equity levels and better supply-demand ratios (2001). Vacancy rates are expected
to continue to rise (2001). The present rate is currently 12% (2001, p. 20). A commercial real estate investor will want to keep abreast of trends in the economy
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