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The Commercial Real Estate Crisis that Never Happened? | International Residential Real Estate Investors Association
Thursday June 29th 2017

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The Commercial Real Estate Crisis that Never Happened?

First, I would say  in whose opinion did the crisis never occur.  Projects are rolling into default, foreclosure, and REO in huge numbers.  Prices have fallen more than 40% according to most estimates.  In my  opinion, if you are an owner or a banker to  the industry, you feel the expected crisis is very real and ongoing.

To  this  point, the  federal government has  not stepped in to stem the  tide in other than existing ways.  Fannie Mae, Freddie Mac, and FHA continue to lend.  Without this, the largest properties in the largest markets would have gone into  free fall.

New construction is at a virtual standstill.  The only  major lender is FHA.

The tertiary markets and some of the hardest hit crisis markets are likely  still losing value.  Over 20% of housing crisis forclosure homes are going to investors and the  issue with  substitute inventory  is  not fully  understood.

For the average taxpayer and consumer, the commercial crunch isn’t a crisis.

However, for investors with cash and a plan, the value opportunity  may never have been greater.  The key is recognizing that any  plan will have to be prepared to provide significant leverage to succeed.

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2 Responses to “The Commercial Real Estate Crisis that Never Happened?”

  1. Very good article although hard to comprehend since I’m from Thailand ;-)

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