March 30, 2010 - Phil Hodgen

Outlook for commercial real estate investment

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.

Foreign Business Activities in the USA US Real Estate Investments