Green Shoots* in Commercial Real Estate
Last month and the month before, press reports on commercial real estate (CRE) began to hint more and more at an imminent recovery. One such report, dated April 22, declared "Commercial Property Bounces Back." This prompted a column on my weekly "Inside Out" feature on HousingWire.com. The column argued that with commercial real estate seemingly doing so well, there was a likelihood of a double dip in the markets. After all, the cliché is that commercial real estate is one step behind residential. Indeed a New York-based freelancer, with more than 10 years experience, applied for work at HousingWire, providing a laundry list of commercial mortgage-backed securities (CMBS) coverage and touting a masters degree in finance and business. That e-mail stated: "The problems of lax underwriting and excessive use of leverage that caught up with the home mortgage sector are now catching up with the commercial real estate sector." "Considering that commercial real estate lags the economy, it will take another year or so for this sector to stabilize," the applicant wrote. "Consequently, this sector is likely to generate news for the near future." The argument goes that since the sector is likely to generate news, then HousingWire obviously needs an expert such as this applicant to provide that coverage. But, the applicant (and my column for that matter) is wrong. Dead wrong. TO READ THE FULL STORY, SUBSCRIBE NOW.