The Falling Floor
One of the concepts maintaining the large gap between asking pricing of sellers and bid pricing of buyers is that of a falling floor. No one knows how long prices will continue to drop. Or by how much. But I’m hear to tell you that the floor is continuing to fall. Case in point. Two years ago, a large industrial building was sold in Twinsburg. The construction quality was very high, as the building was originally built and owned by its occupant. The company was moving, making the building surplus real estate. An investor stepped up and purchased the building for $36 psf, well below replacement cost. Fast foward to today, where a large industrial building was just sold in Streetsboro, with an earily similar story – high quality facility built, owned and now being sold by its occupant as surplus real estate. But the price was $26 psf, a whopping 36% decrease.
