Here's how you can navigate common logical fallacies in the Corporate Real Estate industry.

2 Post Hoc Errors

The post hoc ergo propter hoc fallacy can be a trap in CRE, where one might assume that a successful deal was solely due to a recent market trend. To navigate this fallacy, examine multiple factors that could have influenced the outcome. Did economic policies change, or were there shifts in consumer behavior? Understanding that correlation does not imply causation will help you make more nuanced decisions and anticipate future market movements more accurately.

3 Appeal to Authority

In CRE, the appeal to authority fallacy can lead you to rely too heavily on an expert's opinion without questioning its validity. Just because a respected analyst predicts a market upturn doesn't mean it's certain. To avoid this fallacy, seek diverse perspectives and scrutinize the evidence behind authoritative claims. Evaluate market data yourself and consider multiple expert analyses before making strategic decisions. This critical approach will help you maintain objectivity and make decisions based on evidence rather than reputation.

4 Slippery Slope

The slippery slope fallacy can cause unnecessary fear in CRE decision-making. For instance, the belief that a minor zoning change will lead to a drastic decrease in property values is often unfounded. To counter this fallacy, assess each step's likelihood and impact independently. What are the actual chances of the zoning change leading to significant negative outcomes? By methodically evaluating each potential scenario, you can avoid being swayed by alarmist predictions and focus on realistic risk assessments.

5 False Dilemma

Corporate Real Estate professionals sometimes face the false dilemma fallacy, believing they must choose between two extremes when other options exist. For example, you might think the only choices are to sell a property at a loss or hold onto it indefinitely. To navigate this fallacy, identify and explore all possible alternatives. Could restructuring the property's lease agreements or repurposing it for a different use be viable solutions? Broadening your perspective can lead to innovative strategies that balance risk and reward.

6 Sunk Cost Fallacy

The sunk cost fallacy is particularly relevant in CRE, where past investments can unduly influence future decisions. You might continue funding a failing project because of the amount already spent. To avoid this fallacy, focus on future costs and benefits rather than past expenditures. Consider what the best course of action would be if you were starting from scratch. This mindset allows you to make rational choices based on current circumstances and potential future gains.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?