Commercial Real Estate Could Become Victim of Credit Market Woes
Recent credit market woes could reduce the hefty prices that industrial real estate has commanded over the past few years, analysts say. “The sale prices of assets are going to decrease,” said Robert Horowitz, of Cooper-Horowitz Inc. “Prices are a reflection of what people can borrow. The buyers can’t get the level of financing that they were able to obtain six months ago.” Compounding the issue is the fact that commercial mortgage interest rates are up at least 0.5%, he said. Cheap credit and and high demand has kept commercial real estate prices elevated even as a housing slowdown has hurt pricing and sales of new homes. However, experts say borrowers with good credit histories can still get loans. “There is still capital available for well-underwritten deals, said William Rudin, president of New York real estate company Rudin Management Co.
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