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4 Reasons why CRE has tougher times ahead

Jesse Colombo, writer for Forbes, predicted in the summer of 2019 that there was a two-thirds probability of a recession in 2020. He believes that at this time, the bubble will likely burst due to the COVID-19 pandemic. Here are the key reasons why:

  • The US Commercial Property Index, created by Green Street Advisors, shows that commercial real estate prices have more than doubled since 2009.

  • Research from the Federal Board of Governors shows that US CRE loans increased by $863B (62%) since 2012.

  • With retail stores being closed since mid-March, many retailers are expected to go bankrupt including Neiman Marcus and J Crew. Green Street Advisors predicts that over 50% of department stores in malls will close by 2021.

  • JP Morgan predicts that US GDP will decrease by 40% in the second quarter.

#Covid19 #GreenStreet #Forbes #Recession #Malls

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