What levels do market forces affect a commercial real estate asset?

Market forces affect a commercial real estate asset at multiple levels, notably the macro, local, and subject property markets.

The macro market refers to the broader economic environment that influences real estate on a national or international scale, such as interest rates, employment levels, and overall economic growth. These factors set the stage for investment and development opportunities.

Local markets are more specific and consider the unique characteristics of particular geographic areas, including demand for commercial space, zoning regulations, and local economic conditions. Understanding this level is critical for assessing a property's potential and evaluation.

The subject property market pertains directly to the individual asset in question. It encompasses factors like the specific property features, occupancy rates, and direct competition in the vicinity.

This comprehensive understanding across these three levels helps stakeholders make informed decisions about purchasing, selling, or investing in commercial real estate, highlighting the intertwined relationship between broader market trends and localized factors influencing individual properties.