Ask tommy2 about Real Estate

[tommy2]

As an update to the real estate discussion we had about 3 months ago...

I am now seeing clear signs in the commercial real estate market that the commercial real estate market is showing a clear divergence between A&B product (which the REITs and institutions are still overpaying for) and C&D product which is changing dramatically. The spread between contract price and closing price is growing (meaning that retrading abounds) and the appraisers/lenders have tightened up a bunch.

What does this mean? For those of you thinking of putting your money into commercial real estate (strip centers, office buildings, even 4 flats or duplexs that are for investment purposes), be aware that the market is in a state of flux right now and that sellers are starting to panic. Keep your bids low and hold firm. More to come.