RCA in the commercial property press:

Recessionary Effects and the New "Normal" for CRE

Globe St reports: Though market observers have yet to reach 20/20 hindsight regarding the most recent recession’s implications, what has already become clear is that it was not an average downturn. “This recession was a balance-sheet recession. It was a crash on an asset class – housing,” stated Bank of America Senior Economist Michelle Meyer, when speaking with GlobeSt.com. This hurt both the supply and demand sides of the economy, including banks and consumers.

Regarding the commercial sector of the asset of real estate, Real Capital Analytics’ Dan Fasulo remarked that the largest result of the most recent recession has been a bifurcation of the market. Some segments of the market, such as the multifamily sector, have been quick to return to “normal,” while others have lagged the broader market or bounced around from month to month at the bottom. He also emphasized the geographic disparities of the recovery, stating that, “In Phoenix, institutional investors are buying class A apartments…There’s still a significant number of people moving to the Sunbelt every year, and nothing has been built in these markets since 2007. The supply side will tighten up.”

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Posted by: Nina Turner

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