The Mispricing of CRE Assets


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The artificial cost of capital leads to massive mispricing of CRE and other assets, says Ori.

The commercial real estate industry is continuing its unparalled boom with increased investment and development activity, primarily in the core markets of San Francisco, New York, Boston, Miami, Chicago, Dallas, Houston, Seattle and Los Angeles. So says Joseph J. Ori, executive managing director of Paramount Capital Corp. and Adjunct Professor of Finance at the University of Phoenix.

“There is also an abundance of investment activity in the acquisition of large property portfolios and small capitalization REITs in going private transactions,” he says. “This booming activity since 2012 has produced another bubble in the CRE industry, similar to what occurred in the industry from 2003-2007 and before the Financial Crash that began in 2008, but with a greater overvaluation.”…

The Mispricing of CRE Assets

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