The commercial market is “frothy” right now and low interest rates are to blame: Zell

On the resi front, "Supply is the elixir that takes care of bubbles"

TRD MIAMI /
May.May 12, 2017 01:30 PM

From TRD New York: The commercial real estate market is getting frothy and low interest rates are to blame for asset inflation and impending oversupply issues, according to billionaire Sam Zell.

The low cost of capital has created an imbalance in the economy resulting in asset inflation, he told Bloomberg.

Before the recession, the average cost of capital was 5.6 percent. “5.6 percent versus zero? That creates quite a bit of stir, quite a bit of asset inflation and I think is not healthy,” he said.

As a result, the commercial market is “a little frothy.”

“I think we’re about to have very significant additional supply” on the commercial front, Zell said.

The residential side is in better shape, he said. “We’re building more multi-family housing units this year than we’ve built at any time in the last 25 years. Supply and demand will balance it out,” he said. “Supply is the elixir that takes care of bubbles.” [Bloomberg] — E.B. Solomont


Related Articles

arrow_forward_ios
2965 West Corporate Lakes Boulevard and Black Creek Group CEO Raj Dhanda (Credit: Google Maps, Blue Vault)

TIAA sells Weston warehouse for $33M

TIAA sells Weston warehouse for $33M
Daily Digest Miami

Scaramucci slashes his sights on his Opportunity Zone fund, Florida’s first LGBTQ+ senior housing development breaks ground: Daily digest

Scaramucci slashes his sights on his Opportunity Zone fund, Florida’s first LGBTQ+ senior housing development breaks ground: Daily digest
State report finds open gas valve fueled building explosion at Plantation shopping center

State report finds open gas valve fueled building explosion at Plantation shopping center

State report finds open gas valve fueled building explosion at Plantation shopping center
Bayside Marketplace is planning another high-rise entertainment venue with a view

Bayside Marketplace is planning another high-rise entertainment venue with a view

Bayside Marketplace is planning another high-rise entertainment venue with a view
Construction of downtown Hollywood high-rise may start soon

Construction of downtown Hollywood high-rise may start soon

Construction of downtown Hollywood high-rise may start soon
South Florida firm, partner acquire Tampa office building for $29.4M

South Florida firm, partner acquire Tampa office building for $29.4M

South Florida firm, partner acquire Tampa office building for $29.4M
Developer borrows $105M, breaks ground for mixed-use Flagler Village project

Developer borrows $105M, breaks ground for mixed-use Flagler Village project

Developer borrows $105M, breaks ground for mixed-use Flagler Village project
Moishe Mana plans mixed-use project with logistics theme next to airport in Panama

Moishe Mana plans mixed-use project with logistics theme next to airport in Panama

Moishe Mana plans mixed-use project with logistics theme next to airport in Panama
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...