Tapping the Brakes: A Slowdown Beats a Crash
Commercial real estate debt and equity markets had a pretty smooth ride for the past several years, but the road has gotten a bit bumpy lately. The question is whether the volatility is a sign that the real estate market is headed for trouble. Fundamentals like rent growth and occupancy rates are favorable, and the economy is chugging along, but a credit crunch can hurt the business as badly as an economic slowdown, but that’s not what this looks like. It actually appears that investors learned their lesson in the last cycle and are “tapping the brakes” now to avoid a crash down the road.