With eclipse-mania in full force, we note that according to market professionals, commercial real estate has gone through an eclipse of its own and is now starting to wane. A survey released last week by JP Morgan of major real estate investors to include banks, insurance companies, pension managers, hedge funds, money managers and REITs shows that most investors believe we are in the late stages of the commercial real estate market expansion and that a more defensive posture is warranted.
Tag: Credit Outlook
First, let’s stipulate that we really have no idea where we are in the real estate cycle. We recognize that this is less than stellar opening sentence and one that doesn’t inspire confidence, but we don’t want to mislead. That said, since we are forced for management and regulator purposes to monitor the real estate business cycle, we have a model that looks at each major commercial real estate sector and predicts where we are in the economic cycle. For ease of understanding, we have equated the real estate cycle with the proverbial baseball game.