Cash is King

The credit crunch continues to have a large impact on commercial sales and dictates who the potential buyers will be in this market. Investors with large amount of equity are winning in today's real estate opportunities.  Cap rates continue to move upward on commercial real estate, driving prices lower and lower, making today as the time to buy real estate.  Those with large amounts of equity and large sums of cash are positioned to buy properties at discount rates.  But as prices adjust to the new market values, many sellers have not made that price shift to today's repricing.  Right now what we are seeing in commercial real estate is a bid-ask gap.  Many sellers are still in a mind set of yesteryear's prices and with banks sitting on the sidelines, buyers are more selective on what they are willing to invest in.   As we approach loan maturity dates on commercial, it should make for interesting opportunites.