Stormy future for US commercial real estate, Pimco says

Report projects 5 percent drop in property values

TRD LOS ANGELES /
Jun.June 21, 2016 04:00 PM

From the New York website: Tighter regulations, a volatile debt market and low oil prices are signaling choppy waters ahead for the U.S. commercial real estate market, according to a new report by Pacific Investment Management Co.

The confluence of factors “is creating a blast of volatility for U.S. commercial real estate,” PIMCO’s report stated, according to Bloomberg News. In the report, “U.S. Real Estate: A Storm Is Brewing,” the Newport Beach, Calif.-based investment manager projected prices would slide as much as 5 percent over the next 12 months.

Prices are already dropping in New York and nationwide. Over the past three months, U.S. property values slipped 3 percent. Real estate deals in New York are projected to drop by up to 30 percent in 2016, according to Cushman & Wakefield.

In part, price growth has been stymied by high borrowing costs on commercial mortgage-backed securities. But real estate investment trusts have also staggered, and some are becoming sellers, while foreign investors are in limbo.

In particular, the Chinese government is reportedly considering controls on capital outflows while lower oil prices could slow activity from Middle Eastern investors. [Bloomberg] – E.B. Solomont


Related Articles

arrow_forward_ios
From left: Saeed Nourmand, Michael Nourmand, Grant King and Richard Heyman

Relevant Group sues Nourmand & Associates’ founder, alleging extortion over hotel projects

Centennial founder and CEO Steven Levin with a rendering of the project

Centennial Real Estate approved for sprawling $300M mixed-use village

Apartment complex at 1435 Stanley Avenue and Raintree Partners CEO Jeffrey Allen (Credit: Apartment Finder)

Raintree Partners spends $79M on Glendale multifamily portfolio

LA Mayor Eric Garcetti

Down goes Measure EE: Property tax referendum routed at polls

CIM Group Founders, Shaul Kuba, Richard Ressler, and Avi Shemesh and 4750 Wilshire Boulevard (Credit: Google Maps)

CIM Group lists part of its Miracle Mile office campus

Arman Gabay and The Springs shopping center in Palm Springs, part of the 14-property portfolio

Charles Co. secures $215M refi for retail portfolio

Joon Choi, principal at Harbor Associates, and 2400 Conejo Spectrum Street (Credit: Google Maps)

Harbor Associates leases up then sells off its Thousand Oaks office park

9300 Wilshire Boulevard

Land under historic Beverly Hills office building sells for $25M

arrow_forward_ios