The Commercial Real Estate Alpha Site

While things are more turbulent in today’s Commercial Real Estate arena, things are still the same. Investors are seeking quality investments with decent returns and Seller’s are optimistic to achieve a sale at the highest dollar amount possible. SOP.

We recently brought three properties to market which originated from a portfolio.

These properties are highly distressed but are located in desired locations and while I’d likely say it was market conditions and Investors / Developers that helped the trustee and sellers achieve such strong pricing and terms, but I also had a small hand in the marketing efforts, so I’ve got to be careful not to pull anything while I pat myself on the back.

I’ve attached a couple of photos of these opportunities below for reference.

Some other issues we are experiencing in the industry is the necessity to transact deals as Cash or Seller Financed as Lenders have in essence, shut down, due to increasing commercial rates, DSCR’s and LTV ratios. These numbers have all gone in different directions adverse to investors and sellers.

There are signs of optimism and there are still buyers looking to place funds into quality assets. The sales prices have pulled back from a review of the metrics and this is across the board no matter where you are or what type of asset you specialize in.

Moving forward, I believe you will still see some deals get done, but they will likely be seller financing, 1031 uplegs and even creative deals with wraparounds and assumptions (if at all possible).

The veracity of deals will slow down and it has already as evidenced by market analytics (referenced by M&M, CBRE, etc)

2024 has some hope but it seems the consensus is 2023 may already be signed, sealed and delivered.

Those annoying calls I was making to owners to say, ‘If you want to sell for the highest pricing you may ever see for a long time, now is that time’ have changed to ‘We can take a look at the analysis and we will be realistic with the valuation but you may be better served utilizing other options’ is a common conversation these days.