Commercial real estate prices have fallen 20%-50% from their peaks just a few years ago—but the slide may not be over yet. A “second wave” of the commercial real estate crash is on the horizon now that interest rates are back around 7.5%, and struggling multifamily, office, and commercial investors who thought a long-term refinance would save them are now in a stickier spot.
So…how much lower can commercial real estate prices go?
He was right about past crashes, so we asked Brian Burke to join us again on the show for his take. Brian, quite famously by now, sold most of his multifamily portfolio at the peak of the post-COVID boom, took profits, and sat on the beach for a few years while strategizing when (and how) to get back into the market.
But even Brian isn’t convinced this is the bottom for the multifamily market—rent concessions are plentiful, lease trade-outs are negative (new renters are paying less than previous renters), and cap rates haven’t expanded enough. But the time to strike could be coming soon.
Today, Brian shares the game plan he uses to gauge when to get back into a bottoming-out market, and what buyers must do to get a great deal, great funding, and a great exit.
In This Episode We Cover
Why the commercial real estate crash may not be over yet (a “second wave” is coming)
Incoming cap rate expansion and why brokers are still pushing almost illogical multiples
The “four-way traffic collision” that caused the commercial real estate value drop
Why trying to time the bottom will cost you, but getting in a little bit late will not
What a “good” multifamily deal looks like to Brian in today’s market
And So Much More!
Links from the Show
Join the Future of Real Estate Investing with Fundrise
Join BiggerPockets for FREE
Sign Up for the Investor Brief Newsletter
Property Manager Finder
On The Market 440 - Commercial Real Estate Is Quietly Setting Up for a Decade-Long Bull Run
Brian's BiggerPockets Profile
Dave's BiggerPockets Profile
Praxis Capital
Grab Brian’s Book, The Hands-Off Investor
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-470.
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