Forecasts, whether explicit or implicit, underwrite every investment decision. Forecasting is particularly important in real estate because capital commitments are often long term, assets are high value, and transaction costs are high.

Real estate forecasting poses unique challenges. Liquidity in real estate markets is typically low in comparison with equity and bond markets. Low liquidity means analysts must sometimes rely on limited data sets to establish market trends and turning points. The fact every real estate asset is unique amplifies this task. Furthermore, market conventions (such as lease terms and duration) and definitions (such as capitalization rates) vary between countries, and often between markets and market sectors in the same country, so benchmarking is difficult.

Emphasizing the importance of forecasting, real estate investors make decisions against a backdrop of macroeconomic uncertainty to which real estate, as a long-duration and immobile asset,