Hoping to take advantage of wreckage in the wake of the coronavirus pandemic, investors are preparing to snap up commercial real estate at rock-bottom prices.
Long before states and cities closed businesses and issued stay-at-home orders, many real estate funds were stockpiling cash and waiting for a buyer’s market. Some have raised billions of dollars in the last several weeks.
As a result, Blackstone Group, Kayne Anderson Capital Advisors, Starwood Capital Group and other investment firms are sitting on roughly $300 billion of equity ready for deployment, said Douglas M. Weill, a founder of Hodes Weill & Associates, a global real estate capital advisory firm in New York. By comparison, property sales totaled $570.6 billion in 2019, according to Real Capital Analytics, a commercial real estate researcher that tracks deals of $2.5 million and up.
“It’s a staggering amount of dry powder,” Mr. Weill said. “Institutional investors are defensively looking after their own portfolios, but they’re beginning to look around for opportunities.”
Read the full article here.