Bank of the West Chief Economist Expects Big Hit To CRE Values
In The San Francisco Business Times Nov. 20, 2020 “Bank of the West Chief Economist Scott Anderson said he anticipates national commercial real estate values will fall 22% from peak to trough. ‘Office and retail are going to be in for tough sledding over the next year and a half to two years,’ Anderson said. ‘A lot of big companies aren’t going to need the big offices they needed before.’ Perhaps a more troubling sign for the national office market is the news this month that State Farm Inusurance is closing a dozen oeration centers around the country that employ thousands of people who will now work from home permanently.” On the other hand, I have heard from senior brokers around the country that there is an immense amount of capital looking for quality commercial real estate investments. How do you price a high-rise that has sbstantial amounts of available sublease space knowing this will come back to the landlord at lease expiration?
