Commercial real estate losing value

This article talks about how commercial real estate is falling in value. The article gives a few reasons to be pessimistic about the economy. One of them:

“We expect construction activity to continue to pull back over the next 18 months,” as “property values still face significant further declines.”

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One Response to “Commercial real estate losing value”

  1. We have owned interests in commercial real estate for years through a private fund. It has performed well because its managers do a great job of buying during the depressed real estate cycle, and then turning around and selling 5-7 years later when markets and rents improve.

    This time, the holding pattern is going to be longer as we were not able to unload some the funds bigger properties during the boom years because too much new construction was glutting the markets around our them.

    Fingers are crossed that the steady outgo from business closures has stablized. We’re still above water due to the right time buying earlier, but if interest rates spike, we are going to see another wave of businesses closing shop and occupancy and rents falling once more.