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When interest rates are higher and less debt is available in themarket, David Sobelman, CEO and President for Generation IncomeProperties, says net lease underwriting is disciplined and dealsare heavily scrutinized. But when interest rates are low and debtis readily available, unsophisticated buyers come in and makemistakes.
"They may have never owned an expensive,asset-management-intensive commercial real estate property before,"Sobelman says. "These are typically the least sophisticatedinvestors who look less at a real estate asset's intrinsicunderwriting measures than someone who is actively looking to ownand manage assets as a full-time profession." Right now, rates arelow, and that could lead to problems, according to Sobelman.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
