Commercial Real Estate is crashing

Commercial Real Estate is crashing.

You must be aggressively making offers, and not wait for data to show you if Commercial #RealEstate has hit the bottom yet or not.

Data comes after the fact of it already happening, not before the fact.

During the 2007-2009 recession, #CommercialRealEstate prices bottom out in 1-3 years and took a total of 3-5 years to recover by 2011-2013.

Be conservative with underwriting. This is not a V shape recovery and much worse than the 2007-2009 recession!

🟢 #ManufacturedHomePark
10% Price Rise Now
20% Price Drop 2008
Past Recovery in 2 years
Very High Inflation

🟢 #Industrial
1.20% Delinquency Rate Now
7% Price Rise Now
35% Price Drop 2008
Past Recovery in 6 years
High Inflation

🟡 #Multifamily
3.02% Delinquency Rate Now
5% Price Drop Now
35% Price Drop 2008
Past Recovery in 4 years
Medium Inflation

🟡 #Office
2.32% Delinquency Rate Now
9% Price Drop Now
50% Price Drop 2008
Past Recovery in 6 years
Low Inflation

🔴#Retail
14.88% Delinquency Rate Now
14% Price Drop Now
35% Price Drop 2008
Past Recovery in 5 years
Low Inflation

🔴#Hotel
22.96 Delinquency Rate Now
25% Price Drop Now
50% Price Drop 2008
Past Recovery in 6 years
Low Inflation

Source: Trepp & Green Street Advisers

Trepp CMBS Delinquency Rate

“The delinquency numbers over the last two months have done even better. However, with relief windows ending for some loans and new parts of the country being hit with the virus for the first time over the last 60 days, an uptick in delinquencies in the future is possible. Going forward, we believe future increases in the delinquency rate will be more modest than what we had seen during the height of the coronavirus crisis.”

Green Street Advisors Commercial Property Price Index

“Prices of most properties are lower than they were six months ago, and 10% works as a rule of thumb, but it oversimplifies what’s taking place,” said Peter Rothemund, Managing Director at Green Street Advisors. “Prices of properties with income streams that will be largely unaffected by the pandemic—either because of property type, lease structure, or some combination of the two— are at, or near, record highs. At the other end of the spectrum, pricing of those assets most impacted—lodging and some retail—has moved so much than buyers and sellers are still trying to figure it out.” 

Get More Real Estate Market Info... Subscribe Below!

Learn more about us and find other resources on buying investment properties with us. Like us, follow us, connect!

Contact Us

We would love to hear from you! Please fill out this form and we will get in touch with you shortly.
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *