A potential convergence of multiple negative trends in the commercial real estate market could create added volatility as slowing growth in China, depressed oil prices and debt maturities threaten to reduce U.S. commercial real estate prices by as much as five percent during the next year. Even the largest property market in the U.S. (New York) is expected to see a significant reduction in real estate transactions this year. Moreover with the added issues present in the commercial mortgage-backed securities markets, price growth has continued to be reduced.
For more information, please see the attached Boston Globe article, "Pimco says 'storm is brewing' in US commercial real estate", written by John Gittelsohn and Sarah Mulholland. For additional information or assistance please contact James Dowling, MBA, Assurance Manager, and member of Marcum's Financial Institutions Industry Group.