CHAPTER 4
Property Sectors and Their Cycles
“There must certainly be a vast Fund of Stupidity in Human Nature, else Men would not be caught as they are, a thousand times over, by the same Snare; and while they yet remember their past Misfortunes, go on to court and encourage the Causes to which they were owing, and which will again produce them.”
—Cato's Letters, January 1721
Certain things are true of all commercial properties: their value and profitability depend on property-specific issues, such as location, lease revenues, property expenses, occupancy rates, prevailing market rental rates, tenant quality, and replacement cost; real estate issues such as market “cap rates” and supply/demand conditions; competition from nearby properties; and ...
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