Cracks in the real estate sector are starting to pick up steam. NYCB and a number of other regional banks are continuing their stock declines today after yesterday's carnage. Barry Sternlicht, CEO of Starwood Capital Group, just came out stating that he believes the office sector as a whole will result in over $1 Trillion of losses. I believe the biggest issue is that the cost to carry real estate investments are starting to make less sense at the current trading prices. This is a manifestation of higher interest rates coupled with the higher costs to hold the asset relative to the annual growth rate in rents. The standard 3-5% rental increases of the past simply don't make sense in a softening market and don't cover the 5%+ annual increases in expenses. Stickiness in the labor market, inflationary pressures for materials, increases in taxes and insurance, and everything in between are putting massive pressure on bridge lenders and property operators. What should you do? If you are an LP, make sure you stress your deals to all these scenarios. Things can get ugly pretty quickly. If you are a GP, set realistic expectations and take big-time reserves for when things go south.
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If you ask me, these numbers make you realize the importance of investing in real estate NOW more than ever! With median house prices skyrocketing and affordability hitting new lows, it's clear that the time to act is today. As an experienced investor in apartments and hotels, I've seen firsthand the power of real estate to generate wealth and financial security. Even amidst uncertain times, real estate remains a solid investment option. Don't wait for affordability to improve - seize the moment and start building your real estate. How about you? What are your thoughts about this post from @Fluent.in.finance? Share it below. #realestateinvesting #affordability #housingprice #realestateinvestor
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Interesting article on CRE. What's your take on the trending situation? With factors such as hybrid/remote work and property prices falling by 21% from their mid-2022 peak, according to Green Street, a CRE analytics firm, are we heading towards a CRE crisis? U.S. Commercial Real Estate Is Headed Toward a Crisis https://hubs.li/Q02Jdx-F0
U.S. Commercial Real Estate Is Headed Toward a Crisis
hbr.org
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Investors bet on property for long-term despite bumpy ride since pandemic. Journalist David Oakley advises that "the wealthy should stick with real estate as their favourite asset class" and in his usual methodical style sets out a clear case for this, but I find fault... Regarding housing for its financial value alone whilst ignoring its social value (or environmental impacts) is the root cause of the current housing crisis. Fellow journalist Alan Kohler recently wrote that... “It will be impossible to return the price of housing to something less destructive without purging the idea that housing is a means to create wealth as opposed to simply a place to live.” Housebuilders are also an investment opportunity, which brings with it the duty to maximise financial returns to shareholders. Hence there is no incentive for them to reduce the selling price of new houses. I dive into this in more detail in my article for The Fifth Estate (link in comments below) - How we manufactured the housing crisis. https://on.ft.com/3VjMnhY via Financial Times
Investors bet on property for long-term despite bumpy ride since pandemic
ft.com
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"Is the Commercial Real Estate Market Prepared for a Turnaround?" Read the full article below..
“Is the Commercial Real Estate Market Prepared for a Turnaround?”
https://cremarketbeat.com
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Helping Investors Find Time + Financial Freedom Through Multifamily Investments // Multifamily Syndicator 🏢 93 doors 🚜 288 doors under development
📈💲If you believe rates are peaking and may fall in the months ahead, 📉 then investing in real estate should appeal. 🏢👀 We can start strategizing now so you're ready when pricing is at or near cycle lows. 🔃 Contact me with all of your questions at 303-547-8775 or [email protected] or learn more at https://ravenholdings.net. . #ravenholdings #denverwealthbuilding #multifamilyinvesting
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Commercial Real Estate (CRE) continues to see unique headlines as borrowing costs remain at elevated levels. In this case, multi-family properties, and debt securing it, are seeing increased pressure from investors who are shorting (i.e. betting against) the asset class. This has implications for the overall US economy and as well as other property sectors like residential. Since the health of multi-family often directly effects how many potential buyers decide to rent versus own their own space. The first quarter should prove pivotal in this asset class’ overall direction. https://lnkd.in/etKJHvcZ
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Perspectives on the U.S. Commercial Real Estate Market May 21, 2024 | 4:00 pm - 6:30 pm K&L Gates In the last four years, the U.S. commercial real estate market stared down a one-two punch of a rolling pandemic and a rapid increase in interest rates. Post-pandemic, how Americans work, play, and live shifted geographic preferences, creating winners and losers. Furthermore, news outlets leave us with headlines of large debt funding gaps. To learn more and to register:
Events for April 2024 – CFA Society of Washington, DC
https://cfadc.org
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Perspectives on the U.S. Commercial Real Estate Market May 21, 2024 | 4:00 pm - 6:30 pm K&L Gates In the last four years, the U.S. commercial real estate market stared down a one-two punch of a rolling pandemic and a rapid increase in interest rates. Post-pandemic, how Americans work, play, and live shifted geographic preferences, creating winners and losers. Furthermore, news outlets leave us with headlines of large debt funding gaps. To learn more and to register:
Events for April 2024 – CFA Society of Washington, DC
https://cfadc.org
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Good article for reluctant investors looking to purchase more properties. Here are 10 cities where the home price are falling and HomeRiver covers the majority for management. Reach out to discuss more. #investors #realestate #realtors #propertymanagement #HRG #SFH
Home Prices Are Falling in These 10 Markets—Are They Ripe for Investing?
https://www.biggerpockets.com/blog
