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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (17230)	2/12/2004 9:20:19 PM
From: Elroy Jetson	Respond to of 306849

Obviously the REITs are better funded but I don't think they initially believed their projects would be empty for four years so far now. On a rate of return basis refusing rents for ten years, because they're 50% less than you expected, is like doubling the cost of your investment. It's irrational from anyone's perspective. The problem is like the frog in a pan of water on a stove. The owner never anticipates ten years without rents. Like the WCT building owners in 1986, they thought rents would firm up within a year. Once the year is past and things are the same or worse, they were even more reluctant to face up to their loss and admit their mistake. After a few years they realized the full measure of their catastrophe but were now just defiant and impossible to deal with.