Excellent work by SitusAMC on “6 Frightening Real Estate Market” trends. Excerpts: “States & cities suffering from revenue shortfalls may look to commercial real estate to fill cauldrons. States are anticipating budget shortfalls of about $434 billion from 2020 through 2022, according to the WSJ. In California, ballot measure Proposition 15 would permit local governments to tax commercial real estate based on current value rather than on the last time a property was sold, generating up to $11.5 billion in extra tax revenue for local governments.”

As of this morning Prop 15 failed with 51.7% (7,729,799) voting NO and 48.3% (7,224,119) voting YES. As states look to increase taxes to close shortfalls, they might be inclined to look at the assets they already own to fully unlock the existing value of those assets. Inveniam software gives property owners “marks” for this purpose, unlocking value.

On the good news front: “In the midst of this frightening landscape, it’s worth noting institutional investors continued to acquire more assets than they sold in the 2nd & 3rd quarters of ’20. Given historically low interest rates, commercial real estate assets remain compelling on a risk-adjusted basis. Meanwhile, residential housing is seeing a surge in demand far outweighing supply.”

Read the full post on LinkedIn