Carl Icahn is a busy man. On the same day he agreed a restructuring plan with constantly-on-the-verge-of-bankruptcy CIT, he told Bloomberg’s Tom Keene he quite concurred with Wilbur Ross’ earlier assessment of the outlook for commercial real estate in the US, and that he was puzzled by the current valuations of real estate investment trusts.
Ross’ assessment, for the record, was overwhelmingly bearish: he expects a “huge” crash in the market.
As Bloomberg reported:
“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”
…Ross, the 71-year-old chairman and chief executive officer of WL Ross & Co. LLC, said in an interview on Bloomberg Radio that he would use “extreme caution” before putting money into commercial real estate, especially office space, because properties are losing tenants.
You can also tune in to the audio clip.
Related links:
CRE Prices: Healthy and Distressed - Calculated Risk
All aboard the commercial real estate bailout train - FT Alphaville
More bad news for Tishman Speyer and NY commercial real estate - NY Times
Peeking into Wells Fargo’s pandora’s box of commercial real estate - FT Alphaville
