#CRE market rent forecasts are a nice to have but not indicative of your project.

Every real estate company out there creates some type of market research reporting showing rent changes in one or many markets.  Almost invariably these forecasts show that rents will be going up as vacancy rates go down over the next 5 years.

Interestingly, for specific projects in that market the market rate you will be provided has no basis on that market report.  Your project rate will be based on the buildings most applicable to your need and your broker’s ability to negotiate with those applicable landlords.  In most cases it shows how you will save money versus the market (today and at the end of the lease).

The disconnect between research and execution shows why the forecast is nice but actually unnecessary to your project.  However, it does create a point of reference and frame for identifying what a successful project should look like.  Whether this frame of reference is good or bad for you is another question – but that’s for you to challenge.

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