Real Estate Industry in a bubble?

Was speaking with someone in my network (M7 mba student, soon to be working in RE) about the amount of RE interest/activity on WSO and he responded "With this amount of interest I should worry that I am entering an industry that's in a massive bubble!"

I fed him some a couple stats about the growth of WSO's RE forum (currently the #2 most viewed forum on the site based on views. Really started trending up Oct 2015) and he responded: "Thanks, that's super useful - also extremely worrying for me :)"

What are your thoughts?

 

Forum that attracts the attention of young professionals choosing a field in which to make money in. I'd say it's actually a pretty damn good way to see what's up. Usually when something becomes the new sexy thing everyone wants to do (hedge funds pre 2008), startups and more startups today (unicorns anyone?) The trade is becoming over-crowded as everyone and there mother wants in. True there will always be winners and losers, but with more people in that creates a lot more potential losers!

 

Possibly, I think a lot of it has to do with the fact that the RE industry got shat on so badly during the recession. I'm not going to name my market, but there was little to no construction activity from about 2008-2013. There is a pretty serious demand for housing and new buildings seeing as how many of them were built pre-2008. At least in my opinion, there is a lot of catching up going on right now.

 

Are prices high? Absolutely. Is there going to be a massive bubble similar to 2008? I don't think so.

I've heard that "we're at the peak of the market" or that "a bubble in incoming" since I first entered the industry almost 2 years ago. Hell, my boss even had an appointment in his calendar a few months after I started working that literally said "PEAK OF THE MARKET" on a specific date and others were always telling me how bad things were about to get. My guess is that people are exaggerating a bubble that will be occurring only because of the bad taste left in people's mouths from the last time the market went sour. However, I'm seeing a lot of caution now because of how bad things were almost 10 years ago.

I do think more and more people are trying to get into real estate. My guess is because you can make a lot of money without having to go to school for 7+ years. As a somewhat recent college grad, students are seeing that the money isn't in being a doctor or lawyer anymore and that's leading more people to want to join the industry.

 
Best Response

I don't think we're in a "bubble." Asset prices, by and large, are justifiable based on interest rates, underlying rents, lender underwriting, available capital and overall supply/demand. Asset prices are "high" (i.e. returns are relatively low), but I don't see asset prices as entirely unjustifiable. Do I think prices could fall? Sure. But I don't see a bubble bursting since I don't really see a bubble (which I tend to think of as a huge run-up of an asset's price without underlying economic justification). You're probably more likely to see the bursting of a tech bubble than a real estate bubble.

Array
 

not when those fundamentals are flawed. most of the demand is boomerang buyers using similar financing to the crisis. the music will stop again, it won't be 08, but it will be a correction. easy money will dry up and the overleveraged, of which there are many seeing as how they put down 0-3% with sub 620 credit scores, will falter.

Virginia Tech 4ever:

I don't think we're in a "bubble." Asset prices, by and large, are justifiable based on interest rates, underlying rents, lender underwriting, available capital and overall supply/demand. Asset prices are "high" (i.e. returns are relatively low), but I don't see asset prices as entirely unjustifiable. Do I think prices could fall? Sure. But I don't see a bubble bursting since I don't really see a bubble (which I tend to think of as a huge run-up of an asset's price without underlying economic justification). You're probably more likely to see the bursting of a tech bubble than a real estate bubble.

If the glove don't fit, you must acquit!
 

In what way are the fundamentals "flawed"? I don't agree that much of the demand is buyers using bubble-era financing techniques. Underwriting has been much, much more conservative this cycle than in the prior bubble cycle. Your average developer/borrower can't get financing for spec commercial space in this market. Getting finance for spec commercial development is a key signal to bubble, and I'm definitely not seeing that.

Array
 

I don't know where you are getting the "boomerang buyers" driving this market. Leverage is lower this time around and underwriting is more conservative. Also, yeah prices are higher than recession era, but I'm not sure what fundamentals you say are flawed. New supply coming on the market is much lower than historical norms which means demand will be increased due to fewer products for people to bid on. Classic supply/demand curve for now. I know there is more product coming on the market, but that kind of construction takes serious time.

A statement like "the music will stop again" is useless if you don't give reasoning. Of course it will, but you didn't give any support as to why which would help us understand your timeline for the correction.

And are you talking residential or commercial with your 0-3% statement? I don't know of anyone getting that leverage on commercial.

 

I'm not sure loans are being handed out. I'm currently getting a loan for a house that's about equal to 1 year's salary, with 20% down, a 780~ credit score, and enough cash to pay the next 4 year's worth of payments. But I've had to explain "suspicious" deposits into my account, a reference to confirm I'm employed where I claimed to be employed, address changes, and submit tons of documents.

All for a 1200 sq/ft house in the midwest worth less than an IB associate's bonus.

 
Virginia Tech 4ever:

I don't think we're in a "bubble." Asset prices, by and large, are justifiable based on interest rates, underlying rents, lender underwriting, available capital and overall supply/demand. Asset prices are "high" (i.e. returns are relatively low), but I don't see asset prices as entirely unjustifiable. Do I think prices could fall? Sure. But I don't see a bubble bursting since I don't really see a bubble (which I tend to think of as a huge run-up of an asset's price without underlying economic justification). You're probably more likely to see the bursting of a tech bubble than a real estate bubble.

Absolutely everything about this. I can see specific markets cooling off, but price and cost escalations aren't exponential and there isn't massive amounts of spec activity.

Edit: AndyLouis WallStreetOasis.com - hah, why did it quote all of that about flagging the content?

Commercial Real Estate Developer
 

On an aside to what VT is saying, we are likely to see a "bubble" burst in the sense that asset prices are soon to stabilize and those who are late to the game might be stuck with assets that aren't performing against their models. However I don't see a huge asset price collapse like we had 2006-2010ish.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

I don't think we are in a 2008 bubble, but I also don't think any of us see rents go much higher. Usually (not everywhere but on average) commercial follows residential by a few months. With that, the default rate within the first 60 days on resi mortgages actually ticked up for the first time since the recession in the last report I saw. Does that mean the same with happen with commercial? No, but look at all the concessions being given for condos/apartments. There is also more stress in bottom tier retail credit anchor financials, so tenant issues will be something to keep an eye on. Definitely agree with Virgina Tech 4ever - i don't think real estate will be the industry throwing us in the next downturn.

 

To highly simplify commercial real estate into a single entity, yes Real Estate might be due for a correction. Asset prices are fairly high, and much of the acquisition-frenzy was driven by ridiculously low rates. There's a reason REITs tend to have an inverse correlation to interest rates. If we see 3 rate hikes this year, it might be the impetus needed to get holders to sell.

That being said, we're a far cry off from 2008. This is more of your garden variety business cycle sorta thing that I'm thinking will happen in the not so distant future.;

 

Like many previous comments I agree that asset prices are high, but we are not in a bubble. I don't see as much growth in the near future as we have seen recently because rent prices have increased so much. I think that real estate will level off or dip some, but not take a nose dive.

Not the market I work in, but I was in Raleigh NC recently and talked to some locals because I drove by multiple housing developments with price ranging from 400k to 1 million. They said houses are being sold at a higher price than what was originally listed because the demand is so high. This helped justify the increase in housing but I believe this trend will level off and the market will get to equilibrium.

 

I think that with such a long bull market and low interest rates many of the more traditional asset classes have played themselves out, for the most part, so real estate is probably receiving a great deal more interest. Can't speak for asset prices within the real estate world, but I think the aforementioned probably has something to do with the increased interest. Just my two cents.

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AndyLouis:
I fed him some a couple stats about the growth of WSO's RE forum (currently the #2 most viewed forum on the site based on views. Really started trending up Oct 2015)

fist bumps everyone

Good work, crew

Commercial Real Estate Developer
 

I don't think there's a bubble, it's just the nature of real estate has just been 'kept on a stronger leash' than what might be observed in the past cycles. There's a good amount of supply coming though and with interest rate increases we'll see deflationary effects on prices, but not another 2008 for sure.

I think people are discounting black swan events. 2008 was a black swan event. A disastrous market crash always happens due to no one's predictions. In the last 12 month there have been some significant global events, like the rise of nationalism around the world.

What would happen to RE if we lost a significant amount of our immigrant population (legal and illegal)?

What would happen to RE if we got into another global conflict?

What will happen to RE with the biggest upcoming tax reform in the last few decades?

These are the topics that people should be talking about, because everyone knows 'LA luxury multifamily is over supplied and rents will likely begin to fall in the next 12-24 months as concessions increase' or 'asset prices will fall with three expected rate increases in 2017'.

 

There is never not a bubble brewing in both housing and CRE. They inevitably happen.

Guys, literally all through the 90's, the entire decade, the economy was good if not great (except 91' recession) and real estate was absolute shit. Apartments weren't even hitting debt coverage for over 5 years. Commercial was way worse than our recent recession. Look at loan delinquency rates of commercial loans in the early to mid 90's. I think it peaked at 13%. That's super high.

For sale housing was flat from 91' to about 99'...if you discount that for inflation it was down around 10% over an 8 year stretch. This all happening in fantastic economic times.

Anything can happen.

Edit - here is the Federal Reserves stats. For sale housing was crap during very low loan delinquency. Commercial loan delinquency in the recession peaked at about 8.75%. In the early 90's it hit 12%. The difference between 8.75 and 12 is an epic bloodbath. https://www.federalreserve.gov/releases/chargeoff/delallsa.htm

 

In other words, so long as you're always yelling "fire" you will eventually be right. The fundamental problem with a position like yours is that in-between market crashes is when you get wealthy in [name your asset class]. 90% of people make their money in real estate "between the crashes."

Array
 

I'm not yelling fire at all. Bubbles never truly go away, they just get bigger or smaller. That's what bubbles do until they pop. Then they start over very small. I've been in the business for 22 years. I certainly know and have seen when investors wealth is created. You're assuming I'm of the opinion that one should not buy (anything) right now.

 

Seems like this thread started as a discussion of the RE career side and turned into a discussion of RE as an asset class. Maybe I'm wrong, but I'll speak to the former anyway.

I think the bulk of this new interest speaks far more to the rest of the industry than it does RE itself. Probably 80% of all these people with "genuine interest in the field" (lol) would be going back to wherever they came from/ where they actually want to be, the second they could. The industry (finance at large, however you define that) is shrinking and people view RE as the easiest way to stay at least tangentially "in". The whole thing has hit joke proportions with the amount of people claiming interest yet having zero discernible ways of actually showing it.

Imo, if the outside industry picked up it would drain out a ton of these people and make everything less competitive (problem being that more people see the outside industry having room to get worse as opposed to better).

 

I don't really agree with this thesis. I think the rise in intetest has more to do with the MF boom we've seen in the past 5-6 years. A lot of kids getting out of college in the past few years went home and found out that their hometowns look completely different. Add to that the disdain people have post-crash of the mcmansion/hummer lifestyle of the early 2000s and the migration towards urban settings and there's plenty of reason to believe young people have a legitimate interest in being a part of creating all this.

Just look at the South Park SoDoSoPa episode - it perfectly encapsulates the cultural shift.

 

In response to the OP, I'll posit the argument that part of the RE forum influx is driven by the continued institutionalization of CRE as an asset class. It's intuitive that as the CRE complex gets more structure, (i.e. more analyst programs, more linear career paths, more transparency into the industry), more wall street types will bleed over to it

Especially for kids coming out of regional schools who are attracted to the linear career path and the perceived bling factor of big boy finance but can't or don't want to sling it in the IB route (I may speak from experience). The CRE analyst recruiting game seems a lot more regional and less insanely competitive than wall street

 
Lizard Brain:

In response to the OP, I'll posit the argument that part of the RE forum influx is driven by the continued institutionalization of CRE as an asset class. It's intuitive that as the CRE complex gets more structure, (i.e. more analyst programs, more linear career paths, more transparency into the industry), more wall street types will bleed over to it

I actually think the institutionalization of CRE is a contributory factor to why prices (in relation to returns) seem high. The institutions are turning the business into more of a science than before--Class A real estate is basically a commodity today.
Array
 
Virginia Tech 4ever:

Class A real estate is basically a commodity today.

On the money. I'm lazy to scrounge for hard data at the moment but anecdotally it's been like pensions and other institutions can't stop ratcheting up their allocations to real estate through this cycle (I would imagine as they're lagging on returns in fixed income and chase yield in their inexorable downward spiral into insolvency *pensions) but whatever the cause, the result is the same: more sophisticated (at least compared to mom and pop) players - not necessarily those money managers, but indirectly by their allocation of capital to funds and then to GPs. I'm not one to talk because I may never have gotten in this arena but for an institutional analyst program, but I can't help but bemoan that it seems like the party keeps getting more crowded. But I haven't seen very many cycles so maybe it's always like this from bust to boom? For those of you who've been in CRE longer - do you feel like crowding is permanently driving down returns in this asset class, more so than just low interest rates?

 

Oh how I wish it had to do with science (or shall I say "has to do with science"). My fear is that CRE has become a natural extension of the bailouts of the industry, and the Fed's "third mandate" of supporting asset prices. It's become a can't lose bet - market does well make money, market implodes and get bailout. Simple.

 

Real estate is such a micro business (location, product type, and product position) it's hard to make blanket statements about the entire industry. Even during the Great Recession there were areas that were relatively insulated from devaluation, both residential and commercial.

The real reason we saw a crash in prices was supply and demand; the market become oversupplied do to poor consumer decision making and slack underwriting standards. Since the recession, we've seen the shadow market (foreclosed properties/bank owned properties) almost entirely disappear and construction starts are at a 40 year low. In other words, supply/demand has normalized dramatically. Artificially low rates have probably slowed that normalization some, but on the whole we don't have anywhere near the amount of excess supply hitting the market we did 10 years ago.

Similarly, there is some speculation that low rates have caused a bubble. However, rates generally trend with inflation and with inflation comes more job and income growth. To that end, even if rates rise job and income growth should theoretically offset any added cost. Cost is what would inhibit demand and cause devaluation.

That being said, I think there are corners of the market that have become oversupplied for reasons that don't necessarily have to do with those that contributed to the Great Recession, but rather due to misjudging broad demographic and psychographic trends. These are the foundations of real estate. One example is luxury multifamily. Developers/Investors have made huge bets that millennials will rent and stay in urban centers longer that previous generations. They got one side of the equation right, but it turns out Millennials are poor. As a result, buildings are leasing up incredibly slow, with some of the larger ones never being able to stabilize. Anecdotally, there are at least 10-15 new luxury multifamily buildings that have popped up in our downtown area. My fiance (corporate dev) and I (developer) look at the pricing and gasp - there is absolutely no way average or even slightly above average earning people can afford to pay what these buildings demand (at least without spending 60%+ of their take home pay.) Consequently, all are offering insane concessions to get people through the door.

 

lol it's obvious where your loyalties lay. 'poor consumer decision making' that's the most retarded description of the financial crisis i've ever heard. you're telling me quants that make millions were duped by people barely scraping together 40-50k a year? slack underwriting standards? leaving a loaded gun on a table alone a 5 year old is not 'slack' safety standards. robo signing etc. they knew what they were doing, incentives drove it. give me a break, it was a bubble that was pumped and dumped like most every cycle. and just like the others, the vultures aka berkshire/Blackstone came in and swept up the ruins while banks got bailed out yet the consumer was left homeless. i'm all for personal responsibility, but that also includes every banker/bank that's ever been fined for criminal activity can rot in jail instead of this settlement/no admitting wrongdoing bullshit. i guarantee these 'poor consumer decisions' would vastly come to a screeching halt if the ceo of wells wen to jail for account manipulation, deutsche and Barclays sit in prison for LIBOR manipulation, etc. etc...

coolhandlucas:

Real estate is such a micro business (location, product type, and product position) it's hard to make blanket statements about the entire industry. Even during the Great Recession there were areas that were relatively insulated from devaluation, both residential and commercial.

The real reason we saw a crash in prices was supply and demand; the market become oversupplied do to poor consumer decision making and slack underwriting standards. Since the recession, we've seen the shadow market (foreclosed properties/bank owned properties) almost entirely disappear and construction starts are at a 40 year low. In other words, supply/demand has normalized dramatically. Artificially low rates have probably slowed that normalization some, but on the whole we don't have anywhere near the amount of excess supply hitting the market we did 10 years ago.

Similarly, there is some speculation that low rates have caused a bubble. However, rates generally trend with inflation and with inflation comes more job and income growth. To that end, even if rates rise job and income growth should theoretically offset any added cost. Cost is what would inhibit demand and cause devaluation.

That being said, I think there are corners of the market that have become oversupplied for reasons that don't necessarily have to do with those that contributed to the Great Recession, but rather due to misjudging broad demographic and psychographic trends. These are the foundations of real estate. One example is luxury multifamily. Developers/Investors have made huge bets that millennials will rent and stay in urban centers longer that previous generations. They got one side of the equation right, but it turns out Millennials are poor. As a result, buildings are leasing up incredibly slow, with some of the larger ones never being able to stabilize. Anecdotally, there are at least 10-15 new luxury multifamily buildings that have popped up in our downtown area. My fiance (corporate dev) and I (developer) look at the pricing and gasp - there is absolutely no way average or even slightly above average earning people can afford to pay what these buildings demand (at least without spending 60%+ of their take home pay.) Consequently, all are offering insane concessions to get people through the door.

If the glove don't fit, you must acquit!
 

So banks were forcing people to take on mortgages and credit they couldn't afford? Did they have guns to their heads?

Mortgage lender: "If you leave my office without taking this 2nd mortgage I'm going to shoot you!" Consumer: "OK! Give me a 3rd!"

The commercial space was just as bad. Developers and investors taking on numerous loans for 110% LTC. Come on man, since when did that sound like a financially prudent idea?

There is absolutely no question there were two sides to the coin - lenders AND consumers (residential and commercial) - with greed being the root cause.

I don't know about you, but my parents always taught me not to spend beyond my means. If somebody was offering me two mortgages when I knew I could only afford one I would tell them to pound sand. Welcome to America, buddy. The place where you are 100% free to make your own decisions and where poor decisions have consequences.

 

Great video from Oxford Saiid's Andrew Baum:

"As risk free rates continue down and opinions divide on if they will soon rise or stay low for longer, Professor Andrew Baum outlines the current situation to consider if real estate represents a good value investment or if we are on the edge of a precipice"

 

AndyLouis , our markets are now global. The US housing market is actually where the global rich come to acquire our assets. This is not organic growth of up and coming wealth US citizens but rather our land being carved up by the global elite.

I highly doubt our workforce alone can sustain the current market without the influx of new foreign money.

 

funny you basically touched on one of my points. chinas debt will pop. us real estate has been driven by foreign direct investment, boomerang buyers and easy credit.

i hear some stories saying its difficult, but every year there has been a mortgage program for subprime borrowers putting the exact same people who recently defaulted into a 200k home for only 6k. they allow you to circumvent sources of downpayment, use roomates income as your own etc, have any of you been paying attention at all? the usual waiting window has been practically waved if you can prove an extenuating circumstance/hardship led to your bankruptcy/foreclosure (who the fuck can't prove this?) you can get a new mortgage within a year or two. these are facts, i don't care how tough your bank was, these programs are everywhere and have been for the past 5 years.

http://www.telegraph.co.uk/business/2017/01/23/fitch-warns-time-running…

http://wolfstreet.com/2017/02/27/credit-boom-in-china-to-financial-cris…

http://mymortgageinsider.com/homeready-low-down-payment-mortgage-progra…

https://www.homepath.com/financing-special-offers.html

http://www.cnbc.com/2016/05/26/wells-fargo-launches-3-down-payment-mort…

http://money.cnn.com/2016/02/22/real_estate/bank-of-america-low-down-pa…

http://themortgagereports.com/13372/fha-back-to-work-mortgage

Ebolamonkey:

@AndyLouis , our markets are now global. The US housing market is actually where the global rich come to acquire our assets. This is not organic growth of up and coming wealth US citizens but rather our land being carved up by the global elite.

I highly doubt our workforce alone can sustain the current market without the influx of new foreign money.

If the glove don't fit, you must acquit!
 

one of the most menacing things about asset bubbles is they're easily spotted beforehand but rarely do they burst when you think they will. plenty of examples: greenspan calling a bubble in 96, michael burry calling a bubble in 04-05.

also, we have recency bias distorting our views. yes, we should have had more corrections in the past 7 years, but at the same time, the tech bubble and GFC happening so closely was a rare event. the last time we had 2 BIG declines in a short time period was the great depression.

I get the sense that while future returns are likely lower, we're not in bubble territory yet

 

Regarding real estate career forums, TheVault message boards were one of the top places to read 10 years ago. They changed their format and lost a lot of posters. Maybe more real estate folks are discovering WSO. I know I've promoted it a few times in the past year.

From a MBA real estate club participation perspective, Where I got my MBA, we are nowhere near the popularity of 2007. There are other more sexy options it seems, but interest has improved. Also, there is more competition from MSRE programs, so that might factor.

Have compassion as well as ambition and you’ll go far in life. Check out my blog at MemoryVideo.com
 

Anecdotal, but in the last 3 months we're seeing more of our loans start to have problems at the project level. I know in markets like Chicago, Boston, and Portland there is a ton of supply pushing rent growth down and vacancy upwards. Concessions are lingering around. It's become an issue in last few months that wasn't one 2nd half of 2016.

 

I think it's important to reiterate this point--there are asset cycles and there are asset bubbles. It is very possible that we're going to see downward pressure on real estate asset prices. However, given that real estate prices were not driven up by wild asset speculation that was disconnected from economic reality, it's probably unlikely that you'll see a catastrophic crash in prices (i.e. the bursting of a bubble).

Array
 
Virginia Tech 4ever:

I think it's important to reiterate this point--there are asset cycles and there are asset bubbles. It is very possible that we're going to see downward pressure on real estate asset prices. However, given that real estate prices were not driven up by wild asset speculation that was disconnected from economic reality, it's probably unlikely that you'll see a catastrophic crash in prices (i.e. the bursting of a bubble).

You sound like someone who always talks up his own book. Not saying that you're wrong - just wondering what your intentions are.

This isn't a phenomena confined to New York. I have been seeing some stupid stuff lately. One industrial REIT I track recently bought a newly built distribution building leased for 10 remaining years at a 5.5% cap.

Another example: a British developer wants to redevelop the historic Chicago Main Post Office. The project would be a 20-acre, 17-million square foot project: http://www.suntimes.com/news/6632391-418/old-post-office-figures-in-meg…

That project strikes me as reminiscent of the [url=http://en.wikipedia.org/wiki/Chicago_Spire]Chicago Spire[/url]--which was supposed to be a 150-story ultra-luxury residential building--but which is now effectively dead and is probably one of the largest man-made holes in the world.

 

I don't think there is much of a bubble coming- these projects are still just in blueprint phase, and will take years to complete. These are also targeted at the ultra high end, and there are still plenty of ultra-rich out there with cash to burn. I don't think its possible to underestimate the amount of money sloshing around this city.

One thing I don't get is midtown. That is the absolute last place I would want to live. I guess if you are in the mega-wealthy and the only use for subway maps you have is funny looking toilet paper, and thus have "staff" to take care of all your food and general shopping needs, it doesn't really matter. Its the absolute last place I would want to live though.

As for the second link, I don't understand the aversion to downtown that banks have had. Maybe I have a particularly bad disdain for midtown compared to most, but I loved working downtown. Midtown is so sanitized. Downtown still has that classic Wall St feel. The bars and eateries down there are completely unpretentious but fill their role well. I assume its the higher ups getting cranky about their commute from Waspville CT that is behind it, but maybe there are other more legit reasons.

 
someotherguy:

I don't understand the aversion to downtown that banks have had.

I'm not a New Yorker, but isn't this a hangover from the era of white flight, which is being reversed? Downtown used to be dangerous (lower east side, alphabet city, etc.). Now, the edgy lower manhattan neigborhoods are where the cool kids are hanging out.

 

In terms of sectors in real estate, apartment buildings are performing better than commercial. Besides these layoffs in banking industry, you have also heard about big real estate agencies are claiming higher rents in office buildings, because the available spaces are reduced to the lowest level of the past three years. Tenants are hard to find contiguous spaces in the same building. With higher rents, those landlords will have a higher NOI and sit on a better financial situation.

Yes, banks' layoffs will increase the unemployment rate, but how much it will add to the rate based on the total 4 million of labor forces in New York. And also, construction projects will usually take several years to complete especially for a 90-story high-rise building.

Lastly, New York is always an open-door place where business and people come and leave through its eliminating process by competition. The island has limited space and a higher barrier to enter this construction market. I won't take it as a second round bubble if I see a number of layoffs from big banks and several buildings to be delivered in a few years.

 
Riri83:
In terms of sectors in real estate, apartment buildings are performing better than commercial.

They are, but the projects he's referring to are condo developments. That is the complete opposite end of the spectrum. Not only does there seem to be a nationwide condo glut, it can be tough to get a mortgage if you're a condo buyer these days.

My gut tells me, though, that the construction lenders wouldn't willingly underwrite such splashy concepts during the worst housing bust in history unless manhattan was much stronger than we think (?). The following quote is from an article from today:

WSJ:
Whether there's enough cash sloshing around for all three remains to be seen. "The Manhattan market can handle only one or two high-end developments at a time," says appraiser Jonathan Miller. "The buyer pool for the high-end luxury market is not unlimited."
 

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Reality hits you hard, bro...
 

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  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

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