The first building, located in Nashville's Music Row submarket, was originally put on the market at $2.5 million or $198 per building square foot. From 2005 - 2007 it was very common for Music Row commercial buildings to sell anywhere from $200 - $300 per building square foot.
The building sat on the market for nine months and finally sold for $1.425 million or $115 per building square foot. The sales price represented a 42% discount from the original asking price.
The second builing, located in Nashville's SoBro district, was originally put on the market for $675,000 or $194 per building square foot.
The building sat on the market for nearly 24 months and finally sold for $403,500 or $115 per building square foot. The sales price represented a 40% discount from the orginal asking price.
An owner recently chastised me for sending out information stating that property values had dropped by as much as 40% in some instances.
I certainly understand the idea of a self-fulfilling prophecy and the need for positive thinking. However, I also understand the idea of knowing your market and studying your market.
Property values may rise 20% by next summer or they may drop another 10%. I don't claim to predict the future, but I do think it's a broker's job to know and study the market and communicate his knowledge to people he wants to influence.
As Warren Buffett said about good news and bad news: "Always give bad news immediately. Good news typically takes care of itself."
Excellent post. I appreciate that you are a student of your market and of some of the great people in business and history.
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