“How is it possible to have 25% increases in healthcare costs, which account for roughly 17% of GDP, and not have serious inflation?” said Dr. Linneman. “As inflation takes hold, generations that have never witnessed inflation will experience its destructive power. It is essential that [investors] are aware of the damage that inflation can wreak on [their] net investment position.”

The white paper analyzes the impact that inflation will have on commercial real estate, forecasts the direction of interest rates and provides investment and financing strategies for property owners seeking to shield themselves from inflation’s destructive power.

Beware of Inflation assesses the potential destructive power of inflation and its impact on commercial real estate.

This latest white paper follows A Disastrous Decade, Dr. Linneman’s scorecard for the 10 years from mid-2000 through mid-2010, reviewing how the economy has changed over the first decade of the 21^st century. NAI Global’s white papers and research resources are available for free download at www.naiglobal.com under Publications/Articles & White Papers.

First and foremost understanding Culture; specifically the customer buying behaviors and patterns.  Understanding what people are buying, their socio-economic composition, provides insights’ into Content and what is the best inventory mix to adapt to local market conditions.   Only once a strong understanding of the market place has been achieved can a retailer move to the next cornerstone which is Compliance.  Each country has their own set of rules and regulations regarding foreign expansion/ownership of property.  Compliance is critical to knowing how far a retailer is able to operate in a particular country.

Armed with the knowledge of local culture and compliance, this would enable a retailer to measure Customer capacity or more simply put, “How big is this market for my store or restaurant chain?” Being able to pin point the number of potential customers allows you (the retailer) to then frame Capacity/Competition.  Knowing how many potential locations the market could support in addition to understanding the local competitive presence is critical to framing market expectations and developing a strategic real estate blueprint.

One of the most critical aspects of any sale transaction is to accurately assess the certainty of closing with specific buyers.  The most proficient seller or seller’s broker should personally interview each offeror and buyer’s broker (if so represented) and should request a description of their company, internal approval authority and process, and source of funds and track record over the past several years (including whether they have purchased any property in the last 24 months).  In addition, you should request a list of at least two references from unrelated sellers, who the buyers have previously purchased investment or user properties from in order to ascertain whether or not they have re-traded the price following due diligence.

Armed with the above information, you (or your broker) should then compile a comprehensive spreadsheet, comparing the offering terms and the results of your investigations.  Based on your due diligence and the recommendations of your trusted consultants, develop your best choice for a limited secondary field of offerors.  Once you have made a decision as to whom to move forward with, request a “best and final” bid by a definite date.

Upon selecting the final bidder, try to keep those quality offerors who were not selected in a fallback position, so that, should the chosen buyer decide not to move forward for any reason, you can move on to the next most likely candidate without having to return to the market.