Trophy vs. Distressed

Written by Jim the Realtor

November 5, 2010

They are talking about REITs and commercial properties, but an interesting parallel to what we see over on the residential side – the trophy properties are hot, and the inferior houses/locations are not:

1 Comment

  1. clearfund

    Coincidental timing of the video post as last week we began the securities filing process for a new California property offering.

    The story mirrors what we’re seeing on the ground in commercial as well. We have been effectively on the sidelines for 4 years waiting to start edging back in until we found good cash flow with little if any debt.

    We wanted to let as much of the peak period leases (2005-2007) begin to rollover at lower levels so we could layer a higher cap rate onto the effective lower market rents. This has caused our valuations to be 40%+ lower than the peak values.

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