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> Many investors don't have such a need; especially in the commercial space. According to [1], as of 2015, 77% of commercial real estate is owned by private eq
by trimbo 6y ago
> Many investors don't have such a need; especially in the commercial space.
According to [1], as of 2015, 77% of commercial real estate is owned by private equity and REITs. Those types of investments primarily generate returns via dividends that come from rent. So it seems like most investors can't let them sit empty?
[1] - https://www.thebalance.com/what-is-commercial-real-estate-3305914#:~:text=It%20stated%20that%20REITs%20own,equity%2C%20which%20owns%2043.7%20percent https://www.thebalance.com/what-is-commercial-real-estate-33....
- cnst 6y agoCommercial real-estate leases are often much longer than residential, so, they won't be as affected as fast. As a result, there's also a whole bunch of subleasing going on in commercial RE, hence, it may end up being a whole chain of random third-parties taking the loss for the owners of the buildings (e.g., companies that need to move out of their office after outgrowing it, etc). Surprisingly, this might make an even better argument for the come-back of WeWork -- their whole model from the start was to makeover the buildings abandoned by the tenants. Likewise, it may not affect the sale price at all, because noone would want to tank their own REITs, even if the market itself is stale -- the owners have a vested interest in keeping the bubble afloat.