There is a glut of allocated CRE cash and not enough product. Bloomberg reports: “Investors with a record hoard of money to finance distressed commercial real estate are finding themselves in a tough spot: There’s nowhere to spend it. The massive wave of defaults expected after the coronavirus shuttered offices, hotels and stores last year has so far failed to materialize…Troubled properties aren’t coming to market because owners have little pressure to sell. Commercial real estate prices have held up — or even risen — because so much money is chasing so few deals. “We’re starting to see frustration rolling over into desperation,” said Will Sledge, senior managing director at Jones Lang LaSalle Inc. Investors are “willing to push prices up and their yields down in order to simply deploy capital.” Adds Jonathan Pollack, global head of Blackstone Group Inc.’s real estate debt strategies group. “This isn’t the point at which borrowers are giving up after they have carried their properties through this tough period of time.”
Consistent, periodic valuation of CRE assets based on verified data will open the door for more CRE assets to trade in new ways … i.e., indices, derivatives, ETFs will be formed from these marks. Two way trading in CRE at scale, is on the horizon. #Inveniam
