Understanding CRE rents, especially in a quickly changing market, is more of a challenge than it might seem. When conditions are relatively stable, it's possible to identify rent trends, property valuations, cap rates, maybe operational costs, that move slowly enough to allow expectations that are fairly calibrated to the market.

But when things change quickly — take the office market as an example since the pandemic — it can become difficult to know where things are headed. Could even an expert project rents of a given class of office in a particular area that would be likely in half a year?

That is what CBRE is aiming for with its office sector effective rent series, which it says is based on a net present value analysis incorporating base rent, term, escalations, free rent, tenant improvement allowances and a discount rate equal to the long-run returns of the NCREIF office index. it