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How big is the coming CRE crash? "Huge," says Wilbur Ross, who recommends "extreme caution"...

How big is the coming CRE crash? "Huge," says Wilbur Ross, who recommends "extreme caution" before putting money in. "All of the components of real estate value are going in the wrong direction simultaneously. Occupancy rates are going down. Rent rates are going down and the capitalization rate - the return that investors are demanding to buy a property - are going up."
Comments (9)
  • enigmaman
    , contributor
    Comments (2686) | Send Message
     
    Past reports indicate that all owner equity has been wiped out, 65% of all properties will not be eligible for refinancing, vacanies increasing, rents decreasing its a bloody disaster with no end in site, so yes I would say proceed with caution is the correct call.
    30 Oct 2009, 02:51 PM Reply Like
  • d.t.
    , contributor
    Comments (22) | Send Message
     
    There's an article in the Canadian newspaper (G&M) today regarding the current state of CRE, and, the things are said to have improved so much that there's hardly any attractively priced properties left out there. In Canada, anyway, but even in the States matters seem to be improving..Whom to believe, that's the question - as usual..
    30 Oct 2009, 02:53 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6774) | Send Message
     
    Sounds like a triple whammy.
    30 Oct 2009, 02:55 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    very scary
    30 Oct 2009, 03:06 PM Reply Like
  • predictorman1000
    , contributor
    Comments (252) | Send Message
     
    So why is the IYR and all individual REITs up big this year?

     

    This market is so messed up. Unlike some other questionable sectors that maybe, just maybe, on which a positive spin could be made (say specialty retail or homebuilders), no one, repeat NO ONE, thinks CRE has a chance in the short or mid term. Yet it goes up with everything else.

     

    Ridiculous.
    30 Oct 2009, 03:10 PM Reply Like
  • nightfly
    , contributor
    Comments (1017) | Send Message
     
    Let the facts speak for themselves, you
    30 Oct 2009, 03:24 PM Reply Like
  • ebworthen
    , contributor
    Comments (2811) | Send Message
     
    Commercial Real Estate crisis?

     

    C'mon now gang; the FED will be buying up properties to turn into GM dealerships or housing for laid off union workers and people booted out of foreclosed homes.

     

    Crisis...really now...everything is just fine...Christina Romer told me so.
    30 Oct 2009, 04:01 PM Reply Like
  • herbert hoover
    , contributor
    Comments (2005) | Send Message
     
    You know what would clear this up? If the government did stress tests to determine if banks were solvent! Yeah, that's what we need to do...LOL
    30 Oct 2009, 04:38 PM Reply Like
  • Tack
    , contributor
    Comments (13554) | Send Message
     
    Go look at where CRE REITs were priced two years ago, and you might understand why they've rallied somewhat. Even after these rallies many are down 70-80%.

     

    And, little noted, is that industry default rates are projected at 5.4%, arriving in 2011, but that's little different from the 1989-1992 slump. What's different is that this time REIT prices have collapsed versus making reasonable declines. That's why the CRE REIT space has attrated buyers; it's been oversold.

     

    On Oct 30 03:10 PM predictorman1000 wrote:

     

    > So why is the IYR and all individual REITs up big this year?
    >
    > This market is so messed up. Unlike some other questionable sectors
    > that maybe, just maybe, on which a positive spin could be made (say
    > specialty retail or homebuilders), no one, repeat NO ONE, thinks
    > CRE has a chance in the short or mid term. Yet it goes up with everything
    > else.
    >
    > Ridiculous.
    30 Oct 2009, 06:05 PM Reply Like
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