😨 Coworking Crash Creates CRE Chaos
A new wave of uncertainty hits commercial real estate.
The UK real estate market is sending up some serious warning flares that US investors might want to pay attention to.
Rising interest rates and economic pressures are forcing UK, pension funds and insurance companies to sell-off of their commercial real estate assets.
This could be a glimpse into the future for the US market, where similar conditions might push institutional investors to rethink their long-term holdings.
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After WeWork’s spectacular downfall, landlords are left scratching their heads, wondering what the future holds for coworking spaces and flexible leases.
The once-glamorous coworking model is losing its luster, forcing property owners to get creative to attract and retain tenants.
On the residential side, builders are cranking out new homes at the highest rate since 2009, which could help ease the affordability crisis if buyers decide to jump back in.
But with many potential homeowners still on the sidelines, it’s a waiting game.
In this edition of the AltReports:
💼 Fund Fiasco
✨ Office Overhaul
💰 Builder’s Boom
🏡 Buyer Blues
❗Investor Insight
Video of the Week: How Data Centers Became Hot Real Estate Investments
Chart of the Week: Major Banks Report Surge in Noncurrent CRE Loans
Podcast of the Week: Where to Invest in Real Estate if You’re Starting from Scratch
Everything Must Go: The Great £3.5B Fund Sell-Off
Pension funds and insurance companies, once the real estate hoarders of yore, are now dumping £35 billion worth of property like it’s going out of style.
Why? Because rising interest rates and a shaky market have given them cold feet.
Whether it’s offices or industrial spaces, if it’s brick-and-mortar, it’s on the chopping block.
The Ghost Of Office Past, Present And Future
Remember when coworking spaces were the rock stars of commercial real estate?
Well, those days are over, and WeWork’s bankruptcy was the final nail in the coffin.
Now, office landlords are left picking up the pieces, trying to figure out if flexible leases are still worth the trouble.
Inventory of New Completed Houses Surges to Highest since 2009
Attention all homebuyers: the housing market might finally be throwing you a bone.
The inventory of new homes has skyrocketed to levels we haven’t seen since 2009, and builders are finishing projects like there’s no tomorrow.
Why does this matter? Because it could finally put some pressure on sellers to stop demanding your firstborn in exchange for a mortgage.
Here Comes the Inventory of Vacant Homes while Buyers’ Strike Continues
Even with mortgage rates taking a nosedive, buyers are giving the housing market the cold shoulder.
Why? Because no one wants to be the fool who overpays in this unpredictable mess.
Sellers are left hanging, with some opting to leave their homes on the market for ages or pulling them out altogether.
Commercial Mortgage Originations Jump 27%
In a surprising twist, commercial mortgage originations have jumped 27% in Q2 2023, and it’s all thanks to hotels, industrial spaces, and healthcare facilities going on a financing frenzy.
Hotels are back in the game, riding the wave of the travel rebound, while warehouses are still the darlings of the e-commerce boom.
And don’t forget healthcare—everyone wants a piece of that action, with modern facilities demanding more loans than ever.