Constructing a But-For World… for an Entire Market

In several recent engagements, Grayslake was tasked with evaluating the market-wide impact of a broad-reaching governmental policy change. This challenge is unique in that there are countless factors that must be taken into consideration when constructing a but-for world at the market level.

The Invisible Engine of Real Estate Value: How Tenant Credit Influences Property Values

Most real estate disputes focus on rent. But in our recent work, the more interesting question wasn’t what the tenant was paying – it was who the tenant was. The credit quality of the entity guaranteeing the lease is one of the biggest property valuation levers and is invisible on the face of the lease.

At Grayslake Advisors, we specialize in making the invisible visible. In commercial real estate, that means quantifying what most people overlook, like the millions of dollars in property value created simply by having the right tenant sign the lease. Our latest insights explain how, and why it matters in disputes.

Same Market, Different Answer: How Geography and Concessions Hide the True Story in Lease-Up Disputes

When a market vacancy rate gets cited in a CRE dispute, it almost always comes from a market report covering some defined geography. In our recent work, two of the easiest ways for that number to mislead are the geography it covers and what it counts as rent. A downtown submarket and the broader metro that contains it can produce very different absorption rates over the same period. A market in which face rents look stable can be one in which effective rents have fallen materially through concessions. The cited number can be technically accurate and still be the wrong number for the case.

At Grayslake Advisors, much of our work involves stress-testing the market data that experts and counterparties bring into disputes. The insights below cover two of the places the cited number most often fails to describe the property it is being applied to.

The Headline Number That Misses the Point: Why Net Absorption Falls Short in CRE Disputes

Most multifamily market reports lead with one number: net absorption. In our recent work on lease-up disputes, the more useful question was not what the headline number said. It was what the headline number was leaving out. A market reporting strong absorption can quietly be one in which newly delivered buildings sit empty while older buildings shed tenants, with the two effects canceling at the market level. The number that gets cited rarely answers the question a court is asking. The insights below explain why the most common answer to lease-up questions is usually the wrong one, and how experts and litigators should think of these problems.