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Opportunities, High Returns Abound

WASHINGTON DC 08.16.2017


The Premier Event on Alexandria's CRE Market

Joseph Ney -- Reingold
AJ Jackson -- EYA
Austin Flajser -- Carr Hospitality/Carr City Centers
Opportunities, High Returns Abound
Opportunities, High Returns Abound
We keep hearing that this downturn is going to create great opportunities for buyers. So we visited Sterling American Properties chief investment officer Tarak Patolia in his Rockefeller Plaza office to find out his POV on the market and where the deals lie. Sterling will be seeking opportunities on a risk-adjusted basis, he tells us, and expects that this market will offer higher returns. The most opportunistic investors will be in for the long-haul, yet it's still too early to tell what the investor influx will look like. No one knows where prices are yet (we may already be at or near the bottom), and it may take the market time to settle back into more normal times of the late '90s to 2003. The key is the return of credit and confidence—we’ll put it on our list for Santa.
Opportunities, High Returns Abound
In New York City, multifamily presently feels less risky than office, he notes. Office vacancies are expected to increase (possibly over 15%), putting pressure on asking rents, and it will take a lot of time to return to the high-water mark rents seen in 2007. Multifamily, on the other hand, has less stock and is poised to weather potential job losses. Overall, favorable markets are where investors were priced out these past few years: New York, D.C., Boston, Seattle, Los Angeles, San Francisco, Orange County and Charlotte are on Sterling's radar. Midwestern markets, like Chicago, offer more caution.