Tremendous’ Distress in Commercial Real Estate
Tremendous’ Distress in Commercial Real Estate. Today when one of the head hunchos of RXR Realty was interviewed.
We have been talking about this for many months and it seems like they are again hiding the real truth from the people out there. But the real question is for how long??
We think that if they keep this hidden for too long it could turn into the next big freight train.
When you look at the commercial real estate market right now, “there is a tremendous amount of distress that is not really visible yet,” Rechler said.
Today “the blood is really in the boardroom behind closed doors where people are negotiating to solve problems,” he said.
“This used to be the blood on the streets” in the commercial real estate market, Rechler said, adding, “this happened quickly,” he said.
But today it’s not just about the debt, “they actually have to inject equity,” Rechler said.
If you look at the CMBS (commercial mortgage-backed securities) over the next five years, “about 65 percent of the debt” will be maturing. “You can’t replace the same amount of debt in today’s market with the amount of debt that is maturing—its going to need more equity,” he concluded.
We feel this is an important topic to bring up, and is sort of a monster hiding in the closet. We have touched on this in our previous newsletters…. and we suspect this problem has not just simply gone away.
WATCH THE VIDEO BELOW!
