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Neuberger Berman Real Estate Se Message Board

  • itwirl.round itwirl.round Sep 21, 2009 10:14 AM Flag

    commercial real estate crash

    There are a lot of situations where commercial property owners are coming due on 5-7 year payments and they don't have the money because of depreciation in their monthly intake of rents due to companies closing in office buildings, stores closing in malls and hundreds, maybe thousands of situations like Stuyvesant Town where
    the property owners who paid insane prices for RE at the peak are getting creamed and can't come up with the monthly payments to service their loans. This is the next
    big crisis and there is no way to stop it.

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    • Yes, but, many of the CRE REITs have been raising money recently by selling stock or other means. Right now everyone is happy to buy. now doesn't appear to be the time to sell.

      However, by mid next year, that could easily change.

      • 1 Reply to mizesaw
      • Sure even Neuberger is doing a stock buy back on October 18th. That still won't change the drop coming, it will only help to keep their funds in business when it does. REITs have nothing to do with the their underlying products. I'm not sure of the timing but I expect mid-next year to be too late by a long shot. The upside is so small compared with the potential downside. Remember, during the major market drop, this ETF went down to 77 cents and the main act for their type of holdings is still to come.

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