As we all know the real estate market moves in cycles. Thus I'm curious as to where everyone thinks we are in the current cycle. What property types/markets/strategies are you and or your firm investing in at the moment? And when do you expect the market to top out and the next downturn begin?
Obviously each market and submarket is different from the next so feel free to mention which market(s) you work in and what you're seeing in each property type, the more detail the better.
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We are coming up to the edge of the cliff again
Agreed. People are putting up 50% non refundable on 4% caps with 3 days due diligence, makes it pretty hard to find value in good markets.
Agree with this. I think we're fairly late in the upswing. Yields have been pushed so low on both the debt and equity sides that the number one problem clients have is remaining competitive in the marketplace without sacrificing their money (and dignity). That being said, while I've seen underwriting fundamentals on the equity side start to drift, I (personal opinion an experience - others may disagree), haven't yet seen them deteriorate to a completely flawed level on the debt side (even from the CMBS and debt fund shops) to a point where I worry about a titanic even in the mortgage markets. I think the bulk of the debt related problems we'll see in the next 24 months will still be legacy 10YR CMBS from the 2007-2008 vintages as they move toward maturity.
For what it's worth (if anything) most of my colleagues are fairly open about their views and I work in a large capital markets shop in the southeast in an extremely active marketplace, so there could be a slight geographic bias.
PS - Gene Parmesan - love the name and thoroughly enjoy reading your comments on WSO - lots of good insight coming from your way. Would throw you a silver banana if I had any left.
I worked through the last pullback. Unlike many of my IBD friends...I enjoyed it. I am looking forward to the next one. It's great seeing the tide go out and who is standing there with no bathing suit (to paraphrase Buffet).
Pension funds are still buying and in fact many pension are increasing real estate allocation, REITs are on the way back to their historical high price, and insurance are allocating more to commercial mortgages. I don't see any decline or pop soon ...
Bottom of hill
Some two-bit broker
If you're a lender PM me your contact info.
I'm at a bank right now, sorry
A lot of development is taking place. Halfway up the hill.
I say middle of the hill because things are really unsteady. RE prices are increasing however...
If you aren't amazing at timing its the liquidate-to-hoard-cash-and-wait stage of the game for virtually all asset classes.
Residential housing market in Boston area involves multiple people bidding up to 10% above asking price. You basically have no chance if you only hit ask.
Not sure about financing nor was I around last time but this seems a bit ridiculous to me.
Guys, we're just at the beginning of a massive boom...
On a completely unrelated note, I have a nice property I want to sell you.
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