Reminiscent of 2007, the big brokerages (CBRE, Cushman and Wakefield, etc.) are selling multi-family at 4 or 5 CAP rates! The stupid money is back and they are buying at any price. Cash is pouring into the commercial market from overseas from investors that are desperate to get their money out of their failing economies and it’s not just multi-family. Strip Malls are the next flavor of the day, where there is no listing price necessary. “All offers due by ……” This is so similar to the lead up to the last crash in Commercial Real Estate (CRE.) CRE loans are now back up to high Loan-To-Value (LTV) leverage that we saw prior to the 2008 crash.
The fundamentals of investing in commercial real estate are again being thrown in the trash. This coming crash of the securities, bonds, and treasuries, will not end well for those that over-borrow for properties now. More conservative and patient investors will win the day again for many years to come. Another banking crisis is around the corner, and many loan portfolios of CRE will be available for pennies on the dollar.
In the meantime, I am still finding decent deals for investors now. My successful action over the years as a Commercial Real Estate Broker is patience and constant alertness to fast-changing trends, and finding the right property for the right price for my clients.
Never Run with the Bulls!! (You can get crushed).
Bill Witter, Broker