There Will Be Blood
At the recent CB Richard Ellis Investors Conference in Arizona, The Real Estate Roundtable presented, among others, the following facts:
• The $6.7 trillion pre-crash U.S. commercial real estate investment market is now valued at $5.7 trillion.
• There currently is $3.5 trillion in total commercial real estate debt outstanding. On average, approximately $300 billion of that commercial real estate debt will be maturing annually during the next three to five years.
• Banks and CMBS account for 80 percent of the debt market. Today, both these sources of commercial real estate debt financing remain virtually shut down to new lending.
• As for the underlying fundamentals of the property markets, the picture is grim. Operating income and property values have declined approximately 30 percent, more than $1 trillion of total asset value has vanished, and maturing debt cannot be refinanced.