2023 was a particularly tough year for the real estate industry. The decline in asset valuations that began in many markets in the second half of 2022 extended in the broader market throughout the remainder of 2023. Transaction volumes also continued to decline throughout the year, with pricing conflicts between potential buyers and sellers often paralyzing transactions. Investors will be hoping for a better year in 2024, when prices find a bottom and the market returns to a more normal level of activity. When and how that will happen remains to be seen. Distress may rise, forcing sellers into the…
Author: Private Lending Agent
And on and on: A 0.8-acre oceanfront estate in Palm Beach, Florida, is on the market for $59 million, less than six months after selling for $50 million. The difference? I no longer have a home. When the property sold over the summer, listing photos showed that the home still stood on the site, measuring more than 8,000 square feet. Today, the property features just a lawn surrounded by a hedge, according to listing photos from Sotheby's International Realty. Advertisement – Scroll to continue Plus, with 128 feet of waterfront width and the lot's high elevation, the new owners will…
“We've seen a change, probably a permanent change, in how we use space,” said Andrew Metrick, a professor at the Yale School of Management. Swipe-card data shows that the number of people going in and out of offices is about half what it was before the pandemic. “As long as this situation continues, we're not going to be able to sustain the same amount of commercial real estate we've had,” he explained, adding that he expects valuations for office buildings to fall by about 30%. Compared to mortgages, commercial loans have much shorter terms and usually end with a balloon…
Bank buildingGetty Commercial banks have been reducing lending to businesses throughout 2023. The declines have been small and consistent with the flat trend in total lending of all kinds this year. The changes are not yet a reason to be pessimistic about the overall economy. But the economic uncertainty that is driving the changes is significant for both lenders and borrowers. Since February 2023, commercial and industrial loans held by commercial banks have fallen by $33 billion. That sounds like a big amount, but it's only about 1%. Some bankers point to a decline in deposits as the culprit. “How…
SINGAPORE — From Singapore to South Korea, investors are shying away from real estate deals involving office buildings, shopping malls and other commercial assets, worried that rising interest rates and geopolitical turmoil will threaten global economic growth.Commercial real estate investment activity in Asia Pacific fell 22% year-on-year from July to September, the lowest quarterly total since the second quarter of 2010, according to a November report by commercial real estate and investment management firm JLL.Market data provider MSCI Real Assets said commercial real estate transactions in Asia-Pacific fell 37% compared with the third quarter of 2022, the sixth consecutive quarter…
U.S. commercial insurance premiums rose again in the third quarter of 2023, according to WTW's latest Commercial Insurance Pricing Study (CLIPS). The study compared prices for insurance written in the third quarter of 2023 with prices charged for the same coverage in the same quarter of 2022. Total commercial premiums reported by insurers surged nearly 10% from Q2 to Q4 2020. They then fell to just under 5% in Q4 2022, before rising again to over 5% in Q1 2023 and just over 6% in Q2 and Q3 2023. Line of business price changes In Q3 2023, data for nearly…
James Cook: We are in an AI revolution right now in the business world. We’re getting personalized recommendations in finance. We’re seeing optimization of supply chains in retail. Even medical diagnoses are happening with the assistance of AI. But what about in my industry? What about in commercial real estate? Raj Singh: I think the industry as a whole has not particularly followed the trend of increasing use of technology in order to produce results. So, if you look at other industries like the financial services industry, retail and e-commerce, for example, even places like medicine and healthcare, there’s been…
Reading time: 5 minutes In this blog post you will find further details (and hyperlinks to court documents) regarding the legal process in Moldova related to the recovery process against the borrower Metropolis City SRL, relating to three projects in the Chisinau Metropolis District. ProjectsProject Start PeriodCollateralMetropolis 4DJune 202012 monthsCadastral numbers 0100119.459.01.001-0100119.459.01.083 (43 units)Metropolis 4ANovember 202012 monthsCadastral numbers 0100119.448.01.001 to 0100119.448.01.061 (36 units)Metropolis Business ApartmentsFebruary 202112 monthsCadastral numbers 0100119465.01.021-0100119465.01.060 and 0100119465.01.101-0100119465.01.140 (80 units) Metropolis City SRL accelerates restructuring Administrator: Gîrleanu Natalia Judge: Padulari Valeriu “Metropolis City” had its headquarters at Dacia 59 in the city of Chisinau, in a newly…
Behind the glittering facades of Selfridges in London and the Chrysler Building in New York, Austrian real estate tycoon Rene Benko was assembling a financial time bomb.Mr. Benko's Cigna Group bought stakes in two outstanding assets and built a 27 billion euro ($29 billion) real estate portfolio, but it also took on at least 13 billion euros of debt during years when borrowing costs were almost zero.”He gobbled up all the cheap loans,” said one European real estate executive.Cigna's decision to go all out in an era of low interest rates has left it dangerously exposed to a spike in…
“Overall, the outlook for commercial real estate next year is subdued in terms of capital and space market performance, with some rebalancing continuing across all sectors,” said Ermengarde Jabir, senior economist at Moody's Analytics. Commercial real estate trends by asset class Uncertainty around interest rates and offices remains the biggest concern, but performance has varied across other asset classes. Continued obstacles for office: According to Moody's Analytics, the national office vacancy rate hit 19.2% in the third quarter of 2023. That's up from the second quarter and nearing an all-time high of 19.3%. “Despite these headwinds for office, outdated offices…