The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (14859)	11/6/2003 9:27:00 AM
From: russwinter	Read Replies (3) of 306849

<Why don't they just build their own?.> The cap rates on new construction, especially in the rental market is very low, given the high construction and land costs. There are good infill locations available in Tacoma (much more so than Seattle), but a lot of that is held by speculators holding out for excessive prices. <How many commercial or apartment buildings are actually financed with loans from banks?> You think they just pay with their own cash? It's always other people's money, otherwise why bother. It's a tough risky business, even in the best of times. <educated guess that the building will fill up later if interest rates rise and the rental market improves?> Maybe that's the thinking, but it's not supported by anything I can come up with, and it's area I've focused on before. We call that (your premise) "blue skying" in the biz. <people have been buying commercial buildings throughout the Wash DC metro area.> It's all about PRICE, PRICE, PRICE. The price you pay in real estate is everything.

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