Has anyone heard of any REPE firms or developers laying anyone off yet? With interest rates being where they are, residential has already been hit with layoffs. Does anyone think commercial will be hit as well? Acquisitions seems to be dead (at least slowed way down) for the foreseeable future.
Would also be great to hear from some senior folks. How do layoffs typically work in RE? Redemption queues have seemingly piled up overnight, but does any of that translate to layoffs? What conditions have to be met in order for firms to consider lay offs?
Tough for funds to justify laying people off as they want to be able to buy and manage when the market opens up again. Plus fees are sticky. So assuming they are properly staffed, probably won’t see too many layoffs (except for those that use a downturn as cover like we saw in 2020). You may see some layoffs in developers and syndicators who are dependent on fee revenue to pay overhead. While I’ve never understood it, there are those out there which depend on acquisition fees to pay there staff, which means if there are no deals there is not enough money. There are others that charge enough asset management fees to not depend on deals occurring in order to pay overhead - those firms will also probably be okay.
Anyway, to the above. Haven’t heard of layoffs yet and no one can really predict what will happen. The above are my thoughts and opinions and that is all they are.
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