Six Considerations for Commercial Real Estate Investors Facing Uncertain Market Conditions
October 28, 2019 — In 2015, Sam Zell, founder and chairman of Equity International, sold his multifamily portfolio of more than 23,000 apartments for $5.3 billion. At the time, many industry insiders thought that Zell had sold at the top of the market – just as he had sold his office portfolio in 2007 before the market crashed.1 While Zell walked away from the deal with plenty of profit, multifamily prices have continued to rise – meaning that he could have done even better if he held on.
Watch Out for Rising Bank Exposure to CRE
October 28, 2019 — All the market indicators point to clear sailing for commercial real estate investment. What could possibly go wrong? Hopefully nothing, but the next couple of years will be a good time to closely watch government regulatory agencies for actions that could trigger a downturn.
CRE Capital Flows Through a Changing Landscape
July 18, 2018 — Commercial real estate debt and equity markets have been more or less in balance for several years now, and the consensus is that this state of equilibrium may continue through 2019, barring unforeseen problems. The impact of the biggest problems we were facing—the global impact of Brexit, the “wall of maturities” in the CMBS market, Dodd-Frank’s strict lending rules—has been mostly absorbed without throwing CRE capital markets out of balance.
Opportunity Funds May Supercharge After-Tax Yields, But Risks Remain
May 24, 2019 — A new type federally qualified investment vehicle known as an opportunity fund allows individuals and entities facing capital gains taxes to defer and reduce their tax bite, while paying no additional tax on appreciation of the investment. The only catch is that investment has to be limited to designated areas known as opportunity zones, and the real estate investment requires significant capital improvements to the asset (generally ground up construction).
Observations from CREFC Annual Conference
June 15, 2017 — Q2 Pipeline of new issuance is strong, and up significantly from Q1. Industry adjusting to Risk Retention with outlook that large banking institutions with active CMBS programs will be the big winners and continue to dominate issuance. Outlook for 2017 issuance volume in line with 2016 with predictions ranging from $50bn to $75bn. Concerns about 2018 volume are on the rise with significant fall-off in loan maturities from 2017.