The long standing value paradigm in this industry has always been “Location, Location, Location”. Perhaps that is beginning to change to “Q3”, a term coined by Stewart Title Chief Economist, Ted Jones in a recent presentation he made in Portland, Oregon here recently. Q3 is shorthand for the new Paradigm, “Location Quality, Property Quality, and Tenant Quality”.
Case in point, The Mortgage Bankers Association (MBA) had a brand new 10 story Leed Gold Certified Building constructed just a few blocks from the White House in Washington DC. The MBA paid approximately $79 Million in 2008 for this trophy asset and occupied about half of it. Their inability to lease the rest of the building forced them to sell it to the Costar Group in February 2010 for $41 Million, or a $37.7 Million dollar loss in just over a year. Continue reading