October 2, 2009
The co-founder of Green Street Advisors, Mike Kirby, says CRE may have bottomed. Just 3 months ago he indicated that prices were down 40%, and they were to drop more. What has happened between June and now? Not much, aside from a bunch of money pouring into REITs. On the one hand, one can argue that the REITs and private equity funds, essentially fueled and financed by OPM will have the incentive (fees) to get the market going again and that we have bottomed.
On the other hand, you have deflationary pressures, increasing unemployment rates, debt maturities outstripping available financing, and an equity market that has REITs trading for 110% of asset value (according to the article) and a case as to why we haven’t yet bottomed.
It would be interesting to hear what side readers of this post come down on.
- Deflation Fears Emerge
- Hines to Raise $3.5B in IPO
- Pershing Square on The Outlook For Mall REITS
- Tax Credits and The Law of Unintended Consequences
- Unemployment and Deflation