The city of Warsaw, Poland has single-handedly decreased the value of commercial properties in Poland. How? Griffin Investments bought a commercial property in Warsaw. While negotiating the deal, they sought and received assurances that the property was not going to be declared a landmark. Griffin made no qualms about their intents with this property; they did their homework; they minimized risk as much as they reasonably could. Then, when the ink was dry on their deal to buy the building, the city of Warsaw declared the building a landmark.

This is a simple business equation. The city of Warsaw by their actions increased the risk on commercial properties in Poland. Risk has an inverse relationship to value. Higher risk means lower value. Valuations for future commercial property deals must take this increased risk into account and companies will therefore bid less on commercial buildings.

So congratulations to Warsaw, Poland.

To help you look this up:

Griffin Investments

Emilia building

Do you know how many commercial properties there are in poland? The current vacancy rate?

One deal should have very little impact on the market.

[INSERT POLISH JOKE HERE]


[INSERT LOLS HERE]

... so?

I'd say it's something that affects him directly perhaps?

Nah. He just likes to start political commentary from around the globe just for fun.

Risk has an inverse relationship to value? I guess this new discovery renders most risk return models obsolete.

If you want to buy land in another country don't spend your own money. Borrow from a bank there and if they decide to take your land away, you can decide not to pay them back. Just a helpful heads up for anyone thinking about doing such activities.

Yes, ColoOutlaw. The more risk there is in an asset, the less a potential buyer will be willing to spend to own that asset. We're talking about the price of an asset. Risk return models say the same thing. One mechanism to increase return on an asset whose risks have increased is to lower the price of that asset. As risks increases, lowering the price serves to create greater potential reward.

lol yeah risk has an inverse relationship to price.

I am very attract to risk so I pay a large premium for the joy of it.

price =/= value