From Bullish To Bearish: Tips To Prepare For The Inevitable Real Estate Downturn – BisNow
It is the question often discussed among panelists at the latest industry events, the buzz passed among colleagues during coffee breaks and a factor investors are weighing heavily before making a move and deploying capital: When is the correction going to hit?
MRI Software Industry Principal Brian Zrimsek said the question owners and operators should be asking themselves is not when the next downturn will hit, but are they prepared for when it does? “It is like preparing for a storm,” Zrimsek said. “You put yourself in the best position to ride out the storm.” Commercial real estate has been experiencing a record run of rising valuations for about eight years, and many experts believe the industry still has room to grow. But recent drops in national CRE pricing, rising interest rates, a lack of attractive product on the market and the age of this cycle have some wary of a correction on the horizon. Zrimsek said now is the time to take what is left of the good times — while money is relatively cheap, vacancies are low and rents are high — to prepare for the inevitable downturn. For some, that could mean offloading assets not strong enough to weather the storm. For others confident their properties can hold up long term, these four tips could prove beneficial…
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