Real estate investing is likely at its peak, with crowded markets, flat pricing, shrinking returns, and strain showing. That’s according to a recent article published on FundFire, a Financial Times news service, where MWE partner Nuruz Rahman and other real estate experts weigh in on the state of the private real estate investing market.
Even as trouble spots emerge, however, there isn’t a sense that the market is out of control.
One helpful factor is pressure from investors to cap the amount of leverage that equity fund managers can use on deals and portfolios, said panelist Raphael Fishbach, principal at Mesa West Capital, which specializes in real estate bridge loans and which Morgan Stanley acquired in 2017.
“So it’s kind of taken some of the cowboy mentality out of it,” he said.
It helps that real estate private fund players tend to be confident that one way or another, they will be able to hit the return targets they have set for investors, says Nuruz Rahman, partner in the financial services and real estate practice groups at Margolin, Winer & Evens, an accounting and consulting firm, in a separate interview.
“There is broader optimism and extreme confidence in their abilities,” he says. “Private equity real estate people tend to be very creative. They believe in their strategies.” *Read More>>
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