Commercial Real Estate is crashing! -9.43% loss from March 2020 to April 2020. 😨
Green Street Commercial Property Price Index is a time series of unleveraged U.S. commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted.
Price Index measures the price level of a weighted average market basket.
👇🏽Price Index % changes
+9.95% yearly 1998-2006
-8.33% yearly 2007-2009
+9.41% yearly 2010-2019
+8.29% yearly 1998-2019
-2.67% monthly January 2020 – April 2020
Not all commercial real estate assets are the same.
✔️Affordable Housing will be a strong asset as everybody needs a roof over their heads.
❌Retail, Hotels, Office will be the hardest hit as net income has drastically decreased or non-existent.
COVID-19 recession hit all cities with some much more than the average.
Risks have increased for all asset classes causing CAP rates to rise, so expect values to decrease across all assets. 💣
VALUATION ⬇️ = NET INCOME ⬇️ / CAP RATES ⬆️
⏳The time to buy discounted commercial real estate is NOW before the deflationary crisis ends in 1-4 years.
Source: Green Street Advisors