In the wake of COVID-19, many sophisticated commercial real estate advisors and investors are rejecting the old industry adage to “never fall in love with your real estate.”
That’s because commercial real estate — like so many investment decisions — is influenced by basic human emotions. And unlike stocks or bonds, office buildings, shopping malls and warehouse facilities are not traded like a commodity.
Commercial real estate decisions by both investors and occupiers can’t be entirely data driven. Of course, deep financial analysis, sophisticated data and powerful algorithms are important. But data is often significantly impacted by human emotion. That’s why psychology can have as much influence on real estate decision-making as cold, hard math.
