The Great Reset of Property Prices Is Underway. Brace for More.
The global financial crisis that began in 2007 reshaped the real estate market. Today, commercial real estate is facing a similar “Great Reset.”
Peachtree Group: 'We've been aggressive in lending'
As interest rates continue to increase, banks and other financial institutions are peeling back from commercial real estate lending. But one Atlanta private equity firm is seeing an opportunity — even in the aftermath of the March bank collapses. Over the past 12 months, Peachtree Group has been “aggressive” in lending to groups unable to source debt for projects, CEO Greg Friedman said. The firm is also seeking to buy debt from financial institutions looking to reduce their exposure to commercial real estate.
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The global financial crisis that began in 2007 reshaped the real estate market. Today, commercial real estate is facing a similar “Great Reset.” Property valuations are resetting, capital availability is restricted, and investment activity is curtailed. Thanks to stress on properties’ balance sheets, the situation is set to get worse. More than $1.5 trillion of commercial real estate loans will mature over the next three years. Traditional lenders and the securitization market are unlikely to provide a clear path to replacing these loans. Without one, property valuations will reset further and reprice at levels that reflect current economic conditions. Basically, investors need to prepare for further losses. For more market insights from Peachtree Group CEO Greg Friedman, follow him on LinkedIn.
Peachtree's Greg Friedman: Office real estate distress
Peachtree Group CEO Greg Friedman discusses whether there is an imminent commercial real estate disaster on 'The Claman Countdown.'
Peachtree Group CEO Greg Friedman discusses whether there is an imminent commercial real estate disaster on 'The Claman Countdown.'