25% Price Cuts Coming for Multifamily, Commercial Real Estate

Episode #104

Multifamily and commercial real estate has been the butt of the joke over the past year. As mortgage rates started to rise, commercial real estate investors were hit hard, as profits became pitiful and asking prices laughable. For months, the media has been predicting a commercial real estate crash, citing a wave of mortgages coming due with sellers who won’t be able to pay the high price of a refinance. And while these fundamentals aren’t wrong, a mortgage meltdown might not be a reality.

So instead of speculating, we brought on Richard Hill, Head of Real Estate Strategy & Research at Cohen & Steers, to differentiate the facts from fiction. Richard knows that loans are coming due, and buyers with low-rate adjustable mortgages may be in trouble. But that’s not the whole story, and some parts of commercial real estate could be primed for massive growth that residential investors have no clue about. The opportunities could be flowing soon for those who know where to look.

In this episode, Richard will talk about the true risk of commercial real estate mortgages, which sectors are in the most trouble, which are being blown out of proportion, and how much investors can expect prices to drop. Plus, Richard gives his take on the three best times to invest in a quickly changing market like we’re seeing today.

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Show notes at: https://www.biggerpockets.com/blog/on-the-market-104?utm_source=youtube&utm_medium=description&utm_campaign=none

00:00 Intro
04:31 Welcome Rich Hill!
06:37 A Commercial Meltdown?
15:36 A "Wall of Maturities" Coming Due?
22:22 Banks Cut Off Commercial Investments
29:51 What REITs Know That Investors Don't
32:29 The REAL Mortgage Exposure
41:16 Opportunity is Here
44:25 Connect with Rich!
47:36 Time to Get In?