REM 800 Study Guide - Final Guide: Serializability, Capital Expenditure, Real Estate Investment Trust
4 Apr 2017
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Typical asset classes are; office, retail, industrial, residential, hotels etc. Occasionally, what"s being subtracted from existing inventory: eg new office space, new industrial space, new condos, new houses, shortages = new entrants (egc ondo builders) The market provides new supply when prices exceed replacement cost plus a small profit, risk manageable, expectations positive. The lower the price, the higher the demand can be. The higher the price, the lower the demand can be. The slope of the line is the price elasticity of demand. As the demand line increases to the right and up, supply cannot quickly respond so current owners have a pricing opportunity. As demand drops, pricing drops as leases roll over, or do blend and extend deals, as tenants have more choice house buyers have more choice, and sellers/landlords have to drop price to compete for business.
