Thoughts on the coming recession’s potential impact on CRE in large US markets?
Just wondering how you guys think the anticipated recession this year (some would say it’s already started) will impact large US CRE markets, in particular the urban cores of these areas. I am a multifamily asset manager on the west coast and I have hope that the asset class is resilient enough to remain solid through a downturn, but I’m interested if anyone has other insights to consider.
[{"id": "i98lq6b", "text": "Real estate is slow. 2008 happened and it took until 2012 for things to really go down and by then most things were rebounding.", "replies": [], "depth": 1}, {"id": "i98wp3k", "text": "I think it will.  People are playing fast and loose with rental increase projections to do deals that probably shouldn't be green lighted right now.  If you aren't doing that multi should remain strong.  In a housing crash whole lots of people convert from home owners to renters.", "replies": [{"id": "i9aw5vu", "text": "I saw a deal today where the sponsor was projecting 15% yoy growth. Absolutely insane!", "replies": [{"id": "i9bj1nw", "text": "That is insane. I\u2019m projecting 5% in my models and feel uncomfortable doing so.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i992o5d", "text": "Conservative LTVs will always win.  MF will never get hit as hard as say a single tenant warehouse.  They're not even in same ballpark.", "replies": [{"id": "i99qzod", "text": "i'd tack on too MF hedges inflation really well vs the other asset classes with longer leases", "replies": [], "depth": 2}], "depth": 1}, {"id": "i996c8i", "text": "We still need supply I think it will level out with some needing seller financing", "replies": [], "depth": 1}, {"id": "i99d44q", "text": "its what you know for sure that just aint so", "replies": [], "depth": 1}, {"id": "i99dd3r", "text": "It\u2019s also going to be unevenly distributed. South and growth states aren\u2019t going to be as impacted as Midwest or northeast", "replies": [{"id": "i9ao90z", "text": "What do you think about hospitality in Texas?", "replies": [{"id": "i9bclbj", "text": "Still going to be higher risk. But if local guests, then should stay strong. \n\nSeveral of my clients are buying motels and smaller hotels to run them as STR. Interesting concept", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i9ahk7w", "text": "Raping people with 40% y-o-y increases is definitely not in the cards anymore", "replies": [], "depth": 1}]