Industry deal makers sound depressed and look anxious. It’s themarket bottom and they can’t make deals.
Well, they can make some deals, but if you’re buying, they thinkthe price is much too rich to stomach when you’re at these cyclicalmarket lows. All the sidelined money looks for “opportunisticreturns, but” from prime properties in the best markets, so pricesare bid up and the chance for a big score dissipates quickly. Mostinvestors have no interest in any of the foreclosed crud, figuringthe economy won’t provide enough of a boost in tenant demand tosecure solid gains.
And opportunity funds realize without ample leverage the 20%returns they promise investors will be difficult to achieve underany circumstances, and today there’s no way they can get banks topony up at 75% to 90% loan to values.
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