The panel speaking at today's Georgia CCIM Chapter monthly meeting agreed that the Fair Market Value of most commercial properties in the US has dropped by 30% in the last year.
10% of the drop is due to the decline in Net Operating Income (NOI) resulting from increased vacancies and tenant defaults. The other 20% is the result of increasing capitalization rates.
The increase in cap rates reflects a decrease in demand for commercial real estate along a perceived risk associated with acquiring commercial properties.
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