Pacific Investment Management: CRE Prices Will Fall by 5%

Tightening regulations, combined with debt maturities and property sales by REITs will prompt the fall of commercial real estate prices in the United States in the next 12 months. Pacific Investment Management Co., in a just-released report, indicated that prices could fall by as much as 5%.

According to PIMCO’s John Murray and Anthony Clarke, the dynamics of regulations, overall volatility, maturing loans and uncertain foreign capital flows will also lead to “dislocations and financing gaps across U.S. commercial real estate debt and equity markets.” They go on to say that the dislocations could mean attractive investment opportunities for flexible capital.