Interest Rate Cuts Might Not Be Enough To Save Commercial Real Estate - Here's Why

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Interest Rate Cuts Might Not Be Enough To Save Commercial Real Estate - Here's Why // There's been a lot of talk about potential interest rate cuts over the last 6 months, and how these need to happen as soon as possible in order to save commercial real estate borrowers.
But even though interest rate cuts could be helpful in some scenarios, these might not have the kinds of widespread positive impacts that these news articles are talking about.
And in this video, I want to highlight a few reasons why decreases in interest rates might not provide the kind of relief that investors are hoping for, and some more concrete numbers behind why this might be the case.
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🕒 Timestamps 🕒
0:00 Introduction
0:37 Reason One
2:16 Reason Two
3:52 An Example
6:50 Reason Three
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*Nothing in this video should be construed as tax, legal, accounting, valuation, or financial advice or recommendation. All information in this video is intended solely for educational purposes, and you are advised to consult with your own personal professional advisors regarding your personal investment decisions.
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Research and articles referenced in this video:
www.wsj.com/real-estate/comme...
www.fastcompany.com/91118602/...
www.trepp.com/trepptalk/loan-...
• What is Receivership a...
www.guggenheiminvestments.com...
www.cnbc.com/select/when-will...
wolfstreet.com/2024/02/12/cre...
www.cbre.com/insights/figures...
www.cnbc.com/select/when-will...
derivativelogic.com/forward-c...
www.cnn.com/2024/01/02/econom...
finance.yahoo.com/news/inflat...
www.usatoday.com/story/money/...
www.reuters.com/markets/us/fu...
fortune.com/2024/04/06/commer...
thehill.com/business/4526847-...

Опубликовано:

6 авг 2024

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Комментарии : 31

@BreakIntoCRE 2 месяца назад

Where do you think rates are headed throughout the rest of the year?

@juliastovall 2 месяца назад

not down! : )

@chrisvandinther5692 2 месяца назад

Great video Justin! A video explaining debt funds and how they are bridging the gap on these loans would be very interesting! Thanks for all the useful information.

@cyberla 2 месяца назад

Great analysis Justin! Thank you for breaking down the fundamentals 👊

@5hy1u5t 2 месяца назад

Constantly blown away by your intellect on CRE Justin! Thanks for all your brilliant content!

@iftikharhaq6494 2 месяца назад

Thanks for the great interest rates insight, which I believe it's going to be a commercial meltdown in next 12-18 Months. As an entrepreneur I would like to buy core plus, value add distress assets if I have liquidity.

@scottlanigan 2 месяца назад

Excellent as always! Quick question, is there any idea how many people are employed in the CRE sector and the potential impact your analysis could have on the job market? Obviously negative, but I'm wondering the magnitude? 🤔

@BK-ce3yg 2 месяца назад

More distress in the market will actually force poorly capitalized owners to sell, and there’s enough dry powder for those assets to be purchased at discount. Right now the market is frozen, not many transaction, meaning not as much work to go around. That said, I would expect the CRE job market to be more active as distress properties are put on the market.

@todmann67 2 месяца назад

I have been saying for awhile, "two steps forward, one step back."

@keyvonk98 2 месяца назад

Is it possible to repurpose these office spaces where people are working from home ? I am in the affordable housing sector and I see a lot more competition over the last few years.

@Losomar 2 месяца назад

Yes, some office building are being turned in to apartments. Also, there have been some other unique approaches such as gyms or fitness centers.

@taylorsmall2280 2 месяца назад

3,000% property liability insurance premium increases in Florida, plus SOFR + we’re taking our cash to only invest in legacy non replaceable asset locations or other investments; the FED relies on aged data in an era where they could use nano processing speeds and AI and other software/ APPS/ high tech and there antiquated systems will be the cause of implosion / investors will not take these risks and apartment housing stock will not increase / cap rate increases have lowered values so significantly Capital is going elsewhere

@TheDuke792 2 месяца назад

I'm seeing a shift towards industrial and logistics properties, driven by e-commerce growth.

@juliastovall 2 месяца назад

Thank you soooooo much!

@johnr1350 2 месяца назад

The Fed just projected yesterday that rates will likely need to INCREASE before the end of the year.

@AlesandroM 2 месяца назад

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