Industry pros offer their best ideas on where to deploy cash in commercial and residential property.
This was supposed to be the year that real estate got some relief from higher interest rates, which have roiled the industry for the better part of two years.
But hotter-than-expected inflation has cast doubt on the Federal Reserve’s plans to cut rates in 2024. That’s pushed mortgage rates higher, squashing hopes for a thaw in the housing market. Woes in commercial property, meanwhile, have been slow moving but significant, particularly when it comes to office buildings.
The rise of work-from-home has dampened demand for office space and higher borrowing costs are making it difficult for strained building owners to refinance their debt. With more than $1 trillion in commercial property loans set to mature by the end of next year, buyers, sellers, banks and brokers are contending with just how much values have fallen. In some cases, major commercial assets have sold for steep discounts.
But for savvy investors, crises present opportunities. To identify where those lie in the current environment, Bloomberg News interviewed four real estate experts and asked for ideas for individual investors with cash to deploy in property. Their answers varied from student housing to publicly traded office REITs and funds that invest in apartment buildings. One also made the case for buying land, seeing an opportunity to capitalize on the shortage of homes available for US buyers.
Aside from being potentially lucrative, real estate also ignites personal passions. We also asked the experts where they would invest for both fun and solid returns if they had money to put into a personal property project. Their ideas included everything from escape homes in Uruguay, to buying a winery and developing a driving range.
