Commercial Real Estate FAQ With Ben Marks On CRE Property Investments & Brokerage

What Is The Number One Lesson Or Insight You Can Provide Related To Commercial Real Estate Valuation For Someone Who Is New?

The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.

While everyone hopes assets will go up, it’s important to check your assumptions and focus on the reality of the market. We’ve been lucky in that assets have traditionally gone up every year for around the last 15 years or so, but this can largely be due to the fluctuations in the market. The more you understand and truly get about risk, the more you can handicap those risks and learn to exert more control over them. 

Richard Wilson: What is the number one lesson or insight you could provide related to commercial real estate valuation perhaps for somebody who is just new to being a passive or active investor in this space? 

Ben Marks: You know there’s so many. I’ll try to come up with one or two that have served me in the last 20 plus years, and that is I would say really focusing on the assumptions in the sense that everyone hopes assets go up, and what’s hard is I think in the last 15 years they’ve almost predictably gone up every year so again more function of interest rates than the function of real estate investors are. Although some investors might tell you differently. We don’t drink the Kool-Aid on that, we understand the difference between value add and simply luck in the markets, and they are mutually exclusive. So when it comes to understanding and proforma, which has become a dirty word, I think this market is incredibly tough to try to transact in so the more you understand and the more you get about risk, the more that may or may not happen, the more you can handicap your risk. 

Richard: Right, great. 

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Richard Wilson

Richard Wilson

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