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The only remaining part of effective demand analysis that remains to be critiqued is the capture rate. You just knew I was going to pull out my dictionary again, right? A capture rate is defined as: The estimated percentage of the total potential for a specific type of property, e.g., office space, retail space, single-family homes, that is . . . → Read More: Ineffective Effective Demand – Part 4 of 5 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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