Renowned money manager Sir John Templeton famously urged investors to “Buy at the point of maximum pessimism”. In today’s market environment, nothing fits the bill better that commercial real estate (CRE), where the point of capitulation is here and created opportunities for investors with an eye on buying assets on the bottom and riding the wave up.
I believe there is going to be a huge transfer of wealth between people who have over-leveraged their commercial real estate properties and are stuck, and can’t re-finance, and the investors who have cash on the sidelines ready to strike.
This is a classic example of distress. So, capital put to work in this type of environment should be rewarded nicely for the risk taken.
When it comes to building a real estate fortune, where you build it is not necessarily a major factor. The idea that you have to be in a major market is simply not true. I am living proof that a substantial portfolio of commercial real estate can be created anywhere in the United States.
