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Pimco Says ‘Storm Is Brewing’ in U.S. Commercial Real Estate

June 22, 2016

 

 


Pimco Says ‘Storm Is Brewing’ in U.S. Commercial Real Estate

by John Gittelsohn, Sarah Mulholland | June 20, 2016 — 10:00 AM EDT | Bloomberg

  • Firm warns prices may fall as much as 5% in next 12 months
  • Buying, refinancing opportunities to emerge for some investors

U.S. commercial real estate prices may fall as much as 5 percent in the next 12 months amid tightened regulations, a wall of debt maturities and property sales by publicly traded landlords, Pacific Investment Management Co. said in a report Monday.

A global surge in demand for U.S. property investments that pushed real estate values to records may wane as slowing growth in China, lower oil prices and dislocated debt markets threaten to halt six years of price growth, Pimco portfolio managers John Murray and Anthony Clarke said in their report, titled “U.S. Real Estate: A Storm Is Brewing.”

“Storms form when moisture, unstable air and updrafts interact,” they said. A similar confluence of factors “is creating a blast of volatility for U.S. commercial real estate.”

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Gil Armour, CFP
February 3, 2016

I have been using Blue Vault Partners for the past five years.  I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs.  The reports help me analyze which sponsors are doing a responsible job of managing their offerings.  This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.