Interesting interviewing with Mega Commercial Owner Richard LeFrak discussing commercial real estate issue and further prognosis. I'll highlight the key items below.
* Apartment rents are starting to firm up again as "everyone is working";
* "We are in an unvirtuous cycle as no-one knows what anything is worth, and thus its hard to get financing. Commercial Real Estate lives on debt so if debt is unavailable, its a complete guess what anything is worth".
* Big vague bunch of facts; there is no money available; there will be severe loses by equity owners and some financial institutions.
* Why have we avoided real trouble in commercial real estate? "The reality of the problem is going to be more obvious".
* "We are going to see more and more problems in the next 12-24 months. I don't think there is a 'magic bullet'.
*Even the distress funds have not been that active yet. It will be a dull pain that won't change for awhile "unless rates go to 3-5% and everyone goes back to work.
Weitz Take: finally a rationale and realistic mind in the media - we wholeheartedly agree that this is situation will last awhile and may be worse than many predict. Time will tell, we believe people with extensive real estate portfolios should consider diversifying into other assets.
For more information on Snohomish Commercial Real Estate, consider contacting Snohomish Commercial Real Estate broker.
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Scott@Weitzcommercial.com
t: 206.306.4034
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