Wilbur Ross: Commercial crash on its way
October 30, 2009 04:30PM
Wilbur Ross
A massive U.S. commercial real estate crash is in its beginning stages, billionaire Wilbur Ross said today. The WL Ross & Co. CEO, who is also working on a government program to rid banks of their toxic assets, said he is practicing extreme caution on the commercial real estate investments front, especially with regard to office spaces, which are rapidly shedding tenants. Though the Public-Private Investment Program has made $1.5 billion in pooled government and private funds available to his company for purchasing banks' distressed assets, Ross said he had used less than $100 million of those funds by Oct. 15, and that the money he spent went toward residential mortgage-backed securities rather than commercial properties. Earlier this month, WL Ross, along with several other firms led by Starwood Capital Group and TPG, agreed to buy $4.5 billion in real estate from the seized Corus Bankshares, after the bank's investments in construction loans for condominiums went sour. [Bloomberg]
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Comments
Anonymous
CRE is dead. Maybe it will revive by 2017; not before.
Comment #1 Posted By: Anonymous 10/30/09
Anonymous
Pretty scary stuff. Wilbur Ross has seen a lot more data than most people.
Comment #2 Posted By: Anonymous 10/30/09
Anonymous
Agreed post-2017 will be when the banks would have rid themselves of the 2007 loans on their balance sheet, takeover properties and/or reduced principal to make them viable (which is unlikely).. Deal will be done in NY b/c it's NY but you better own the corner and in prime international shopping destinations.
Comment #3 Posted By: Anonymous 10/30/09
Anonymous
are we all screwed ? what do we do ? seriously . scared
Comment #4 Posted By: Anonymous 10/30/09
Anonymous
CMRE is on the way back up, suckers
Comment #5 Posted By: Anonymous 10/30/09
Anonymous
Place your head between your legs
Comment #6 Posted By: Anonymous 10/31/09
Anonymous
Wilbur is right on course, and commercial real estate is over leveraged. All buyers just lowered their offering price by 10% with this article. Either he is buying and is bluffing with this statement, or all the George Costanza's in commercial real estate that have no talent outside of bluffing a deal will be spending a lot of time in Barnes & Noble. After all why would anyone go to college and then just rent office space for their life's work. Talk about a boring life.
Comment #7 Posted By: Anonymous 10/31/09
Anonymous
7 - what?
Comment #8 Posted By: Anonymous 11/01/09
Anonymous
When someone in the business of buying up distressed companies and/or real estate makes such a "prediction" you have to ask yourself "why would he say that?". In other words, he certainly is not going to make a prediction (right or wrong) that will not benefit himself. That is a 100%, take-it-to-the-bank fact. He is in the business of making BIG bucks. He will be the leading vulture swooping down to pick up the carrion caused by such self-serving predictions. For me...the CRE crash may indeed happen...but I give much more credence to sources making such predictions if they have NO ulterior motive or if they will not benefit greatly if their prediction comes true. That's pure common sense thinking people.
Comment #9 Posted By: Anonymous 11/01/09
Anonymous
Do you mean like the head CRE analyst at DB who said the exact same thing 3 months ago? Is that the impartial opinion you're looking for? Face it, common sense dictates that if billions are lost on CRE loans, it's going to take some time to get this sector straight. Did we learn nothing from the sub-prime mess?
Comment #10 Posted By: Anonymous 11/02/09
Anonymous
Yes. CRE will be much worse and take much longer than the residential sector to return to normalcy. If you make your livelihood in the CRE markets as a broker, I'd find something else to do for a living for the next 7 or 8 years.
Comment #11 Posted By: Anonymous 11/02/09