In the example so far, I’ve only discussed industrial buildings. Effective demand analysis is done slightly different for the other major property types. Apartments look for the demand in units, shopping centers look for the demand in retail square feet, etc. I could spend days analyzing each different type of model, but they share the same . . . → Read More: Ineffective Effective Demand – Part 5 of 5
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Now that the total industrial demand estimate of effective demand has been dealt a mighty blow, let’s look into the next two subjective line items, the Percent Industrial Employed and Square Feet Per Employee figures. Lagging Behind on Percent Industrial Employed In the example from Part 2, the percent industrial employed is estimated at 17.50 percent. I suppose . . . → Read More: Ineffective Effective Demand – Part 3 of 5 OK, so I got on my high horse about the bias that is rife in new commercial construction lending. I can’t be far off when you look at the state of the commercial real estate industry today thanks to overbuilding. Some things will never change. Appraisers use a technique called effective demand analysis to project demand for . . . → Read More: Ineffective Effective Demand – Part 2 of 5 |
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