7 CRE Risks To Avoid in the Current Volatile Environment

It appears that the CRE industry is entering a period of high volatility with the Fed promising to raise interest rates beginning in March, soaring inflation, the war in Ukraine, and a possible recession occurring later this year due to this high inflation, especially in food and gas prices. 

The CRE investment process is a multifaceted procedure to analyze, acquire, finance, manage, lease, and sell a commercial property. There are many steps in the process from evaluating a broker sales package, to analyzing the market in which the property is located, touring the property, raising the appropriate amount of debt and equity capital, closing the acquisition, and managing and leasing the property. Each of these steps is critical to a successful CRE property investment. CRE investment is subject to many risks that were ignored during the last six or seven years due to the buoyant market. However, in this tumultuous environment, there are several concerns that investors should reevaluate to assure a successful investment.