The commercial real estate sector is facing significant head winds from weak business fundamentals, such as high vacancy rates, negative absorption, and flat rental rates, excess supply created during the construction boom, and high leverage both in the commercial loan and CMBS markets. As bank and CMBS loan maturities accelerate this year amid a tepid financing market and already high delinquency rates, the situation will likely continue to deteriorate. In the residential real estate sector, the markets are also soft and homebuilders that made it through the last cycle are likely to be challenged by any slow-down in the economic recovery, and further consolidation among homebuilders is likely. In both cases, an improvement in underlying fundamentals as well as confidence in the economic recovery is needed before values and market activity recovers.
Conway MacKenzie has a wealth of experience working with distressed real estate situations and an impressive track record of successfully assisting real estate related clients. Using our team to assess the economics of real estate portfolios, raise new capital, or to negotiate with existing capital partners, we are able to help clients by maximizing value and repositioning assets for long-term growth.