Is Commercial Real Estate Too Expensive?

• Commercial real estate has achieved strong price growth over the last year

• Top markets across the U.S. have seen 20% to 30% appreciation for different asset classes

• For the most part, values are supported by improving performance metrics

• Yesterday’s pricing doesn’t dictate today’s value – Avoid sunk cost fallacy

  • Just because an asset saw aggressive growth, doesn’t mean it is out of runway

• Investors should instead focus on financing terms, current/future cash flow and eventual disposition price when making investment decisions, not past appreciation