Asking Prices: When Landlords Push Too Hard and Go Against Market Fundamentals

Discrepancies of up to 50% above regional averages are raising red flags. A SiiLA analysis points to gradual value appreciation but warns that distortions are undermining market transparency

Hermano Souza, Senior Vice President and Country Manager at Prologis Brazil

By: SiiLA News

07/17/2025

Inflated asking prices are a common tactic in commercial real estate negotiations. Property owners often set initial asking rates above what they’re willing to accept, creating room for bargaining.

But in some cases, this goes beyond standard negotiation strategy. Increasingly, inflated asks are being used to distort market benchmarks — artificially boosting perceived values in specific submarkets and clouding an accurate view of pricing trends.

One recent example from Cajamar — a key logistics hub in São Paulo Market with roughly 3 million sqm of A and A+ class inventory — has caught the market’s attention. While current vacancy stands at 10.34%, the average asking rent in the area is R$ 28.48/sqm. But that figure masks significant outliers: in its latest availability listings, Prologis advertised spaces at up to R$ 42/sqm — nearly 50% above the regional average.

The timing raised eyebrows. Just months earlier, in December 2024, Prologis fully leased a warehouse at Prologis Cajamar I in the same area to LG, signing a 9,500 sqm deal at R$ 30/sqm — a rate aligned with recent effective rents in Cajamar.

To illustrate this scenario, the market rent in Cajamar — referring to the second quarter of 2025 — was R$ 26.80/m² for properties with similar technical specifications to the Prologis asset analyzed, within the A+ and A class segments. This figure is nearly R$ 2 below the average asking prices and more than 35% lower than the highest advertised rates.

The indicator considers variables such as actual transactions, building standards, availability, and commercial terms. It serves as a technical benchmark to support both market analyses and lease negotiations.

Asking Price vs. Market Rent

By: SiiLA

In Cajamar, the gap between Market Rent and asking prices has been widening for years. Since 2016, asking prices have risen 45%, while Market Rent has climbed just 37%. The divergence accelerated after 2020, highlighting a growing disconnect between pricing expectations and market reality.

Of course, the difference between asking and closing rents is not new — and not inherently problematic. But it becomes a concern when inflated asks are used deliberately to manipulate benchmarks and shape a misleading narrative of appreciation. Such distortions risk skewing decision-making for investors, occupiers, brokers, and asset managers alike.

Why Market Rent Matters?

Unlike asking rents — which reflect only vacant listings and landlord expectations — Market Rent captures the true dynamics of the leasing market. Widely used in mature markets and available in Latin America through SiiLA’s Market Analytics platform, Market Rent incorporates both leased and available properties, factoring in build quality, location, and commercial terms.

The result is a grounded, data-backed benchmark that supports fair valuations, portfolio strategies, and deal underwriting. SiiLA subscribers can access Market Rent data across all tracked properties in the region.

Lessons from Guarulhos

While Cajamar grapples with inflated pricing, nearby Guarulhos presents a more balanced picture. With a 14.24% vacancy rate, the average asking rent there is about R$ 36/sqm. Recently, Fulwood’s Guarulhos Business Park, was leased to the Toniato Group at R$ 32/sqm — just 11% below the ask and within 1% of the local Market Rent (R$ 30.34/sqm).

Guarulhos has access to Brazil’s main highways, sits next to the most densely populated area of the state — São Paulo’s eastern zone — and is located near the largest international airport in South America.

Despite having a smaller inventory, Guarulhos offers more favorable conditions for the logistics market than Cajamar. Even so, asking prices in the region are not as inflated as those seen in Cajamar.

This comparison reinforces a key insight: healthy pricing isn’t just about vacancy or location — it’s about alignment with fundamentals. When asking rents reflect real market conditions, all stakeholders — investors, tenants, landlords, and advisors — benefit from greater transparency and predictability.

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