

Additionally, GS is expecting a dramatic rise in cap rates: in the neighborhood of up to 500 bps:

The core of the problem for REITs and the entire CRE space in general is the rate of vacancy increases across different sectors. This one would be a doozy for the government to "intervene" in unless it decided to spill its employees out of DC and have them populate New York's midtown, all the while paying peak-market, 2005 rents.

Lastly, Zero Hedge's approach at REIT scatter-bubble charting seems to have found fans. An moving chart from Goldman evaluating a whole lot of three-axial data.

1 comments:
Great stuff, i was just putting together a REIT piece for my clients but GS beat me to it re cap rates. In the 1990s cap rates rose to the 9-10% rate in certain areas yet sellside is still using 6-7% cap rates for NAV calcs.
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