Senior Principal Partner and Chief Investment Officer at Guterman Partners
Once Again, Generational
Real Estate Opportunities
Gerry recently published the
latest of his white papers
covering the state of the market,
and where he sees the
opportunities now.
Among the current challenges
he tackles in his report are:
● The increasing number of
rental to condo conversions
● Reducing value of
condominium units
● Cash flow problems due to
rising costs and rates
● Difficulty in refinance for
developers
● Overleverage by builders
● Lack of product to market fit
● Reluctance of lenders to
provide more debt
● Oversupply of luxury condo
units
What this all leads to is
that many of these
developers are sitting on a
huge amount of inventory.
Inventory on which they
can’t really reduce retail
prices on themselves.
While they are facing
more cash flow crunches
and challenges in
restructuring debt. In
some cases individual
developers in NYC are
sitting on 1,000 or more
unsold units. They need
out. It’s a repeat of 2004
to 2008 all over again.
Though when the same
problems show up, the
same opportunities for
creating great cash and
leaps in wealth arise too.
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Strategies for Taking
Advantage of the Current
Market
Gerry told us his firm
currently sees opportunities in:
● Medical offices
● Retail strip plazas
● Family sized apartments
This is of course restricted to
certain states and markets. Most
notably outside of some of those
facing some of the most fierce
political and regulatory
uncertainty at the moment.
Among Gerry’s favorite
strategies in this phase of the
market is bulk buying of condo
units. For example, 80 or so units
at a time. Those units are
converted or resold. Typically
within 19 months.
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