By Christopher H. Volk | Spring 2020

As much as commercial real estate is a game of numbers, data, and analysis, the human component plays a huge role in what deals are made and how they get done. Examine your decision-making process — can you comfortably say you’re free of unknown cognitive biases? Probably not. In that case, what biases — psychological, emotional, and/or cultural, for instance — influence your choice to go this way instead of that? To begin this discussion, let’s take a simple hypothetical: You have an opportunity to invest in either a store operated by an Ashley Furniture licensee or a nearby Home Depot. If all significant variables are eliminated, which do you choose? When I ask graduate business students, they generally opt for the Home Depot. Those who don’t are reluctant, still preferring the Home Depot but assuming some subterfuge on my part. After all, Home Depot has exceptional brand awareness, a high investment-grade A credit rating, and is the nation’s largest home improvement chain, with approximately 2,200 locations. In contrast, Ashley Furniture has about 800 locations, most of which are operated by individual licensees. Simply put, Home Depot as a tenant seems to make the real estate more desirable. Click to read more at www.ccim.com.