For our clients outside the United States who plan to buy commercial real estate (and I met with some of you on my recent trip to Singapore and Jakarta):
By the end of 2010, about half of all commercial real estate mortgages will be underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, in a wide-ranging interview on Monday.
Banks and property owners are going to be under increasing pressure. Prices will drop.
Do your preparation now. Maybe test the market a little. Get ready, get smart.
You don’t want to be setting up your business models (what do I buy? where do I buy it?), infrastructure (how am I going to hold these assets for maximum business and tax efficiency?), and figuring out financing (do I use all of my cash? do I borrow? if so, who is the lender and what is the loan arrangement?) while you’re shopping for deals.
Time and focus. Those are the items in short supply.