In the latest issue of Apartment Finance Today, Robert White of Real Capital Analytics echoes my comments from previous blogs. In an article titled, "Roundtable remains bullish on Apartments", Mr. White states that the credit crunch has lasted longer than expected and that the recovery process in the debt markets has yet to get started. Mr. White also states that Class A properties are selling at very competitive prices- no surprise, as I pointed out earlier that Class A properties in great locations will always command premium pricing- it is the Class B and C properties that require an aggressive marketing strategy and realistic expectations, see my blog dated May 6 2008. Further, many new listings are available but few have closed indicating a "test" market as Mr White calls it. Sellers are testing the market with resistance to accept any discount- at least for now.
In our East Bay area, that is exactly the case- Class B and C properties are still listed in the low 5% cap rates. Do the listing agents really think those properties will sell? Not really, BUT the lisitng agent is thinking an overpriced listing is better than no listing at all. This tactic is a waste of time for my clients and myself- I feel the listing agents who take on overpriced properties have their credibility in question- if you price so agressively- agents are reacting to the seller's demands... Who is the market expert?
Class B and C assets will sell- if properly priced and marketed aggressively. Email me to learn about my proven aggressive marketing strategy. Pete@CommericalMasterMinds.com
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