The new FASB rule 842 is a game changer. It requires that companies hold lease obligations as liabilities on their books where as before, it was simply an off balance sheet item. This changes the incentives for companies and they are much more likely to own their real estate rather than have a developer build it for them and lease it back to them. This is likely to have a chilling effect on build-to-suit activity and profitability.
NAI Benchmark’s Joe Muratore, CCIM was a featured expert in this article along with CCIM Chief Economist K.C. Conway MAI, CCIM.