CRE & REITs – U.S. Real Estate: A Storm Is Brewing – PIMCO

CRE & REITs - U.S. Real Estate: A Storm Is Brewing by John Murray, Anthony Clarke - PIMCO

Summary

• Pressure on U.S. commercial real estate from volatility, regulations, maturing loans and uncertain foreign capital flows suggests prices could slump by as much as 5% over the next 12 months.
• This dynamic will create dislocations and financing gaps across U.S. commercial real estate debt and equity markets, both public and private, over the secular horizon.
• For flexible capital, these dislocations could create attractive investment opportunities.

Storms form when moisture, unstable air and updrafts interact. Similarly, a confluence of factors – volatility in public markets, tightened regulations, maturing loans and uncertain foreign capital flows – is creating a blast of volatility for U.S. commercial...