What Makes Commercial Real Estate Values go Up or Down?

Supply and Demand for one, this is America, we all understand supply and demand, Right? Good lets move along then. Where is the Arizona Commercial Real Estate market now?
As I mentioned in a previous post, is we have available inventory of commercial real estate in Arizona and according to LoopNet, the average sale price per square foot for office properties, in the Phoenix, Mesa and Scottsdale area, has risen, a 4.5% increase since the end of last quarter, the current price is 5% above the three-year-low of $69.65 set in November 2011.
As far as the demand for commercial office properties the interest in office properties listed on LoopNet has risen 12.3% over the past year,  Demand on LoopNet for office properties spiked in the Phoenix Metro Area market, rising 33.6% since December 2011, 4.9 percentage points more than the  national average.
What I didn’t mention was that in the first quarter of 2012 we saw for the first time in 5 years, Net Positive Absorption in office properties in the Phoenix area.
Economic Obsolescence is may be another factor to effect commercial real estate values, if it is a single property as a result of maintenance neglect, could provide a buyer with an opportunity to buy and improve or purchase for the value for the land value and start over again.
Motivation of a buyer or seller would be another factor to effect commercial real estate values.
Many people in our county have be experiencing financial challenges in the past few years, in some cases leading to divorce (motivated sellers) or note having the ability to make the payments on the note, losing the property to foreclosure, while many real estate investors are saying they are having a difficult time finding distressed homes to purchase (at least in Arizona), there are many distressed Commercial Real Estate properties available for investment.


This information is for informational purpose and not intended to be investment advise, and should be explained to you in detail. You should always feel free to consult an attorney and/or tax adviser to obtain further information you deem necessary. I want you to be prepared.

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