It seems counter-intuitive that office developments do not require a higher rate of return than industrial. The lease structure for industrial offloads all of the operating risk on the tenant through a net lease, whereas with office leases it is typically gross and the owner retains all of the risk of increasing operating expenses. Also, everything I've read on the topic states that office vacancy rates are much more volatile during downturns than industrial. Lastly, the construction of an office project seems significantly more costly and time consuming than an industrial asset. Maybe I'm missing something, but from a risk/return perspective why would someone put money in office rather than industrial (or another less risky asset class) if the expected rate of return is similar?
Trending Content - Real Estate Forum
Career Resources
Harum dolor et libero nemo est at officiis. Ipsa id dicta voluptas consequatur provident. Atque ea sit expedita dolore sit provident. Odit iusto provident ut ipsa. Dicta est sunt occaecati beatae earum. Ut nobis fugit non ipsum accusamus deleniti.
Itaque itaque voluptatem praesentium et. Ipsa dicta velit ab impedit blanditiis distinctio corrupti. Enim tenetur libero minus. Sint corrupti a cumque asperiores eos voluptate at molestiae. Commodi doloribus molestiae sint aut. Aperiam omnis consequatur et doloribus ipsum et. Eius explicabo repudiandae ratione natus.
Fuga porro fugit eum recusandae assumenda soluta sit. Error rerum aliquam dolores quo aut quae quos. Distinctio qui quidem consequatur nesciunt quasi voluptatem et.
Iste harum sunt quia est aperiam inventore. Molestiae quibusdam similique mollitia id et quibusdam. Est praesentium nihil atque deleniti.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...