The real estate market could see lucrative deals coming in the next 12 to 18 months as debts are set to mature this year, an expert said.
Speaking during Benzinga's "Unlocking Real Estate Riches: Property Prosperity In The Digital Era" webinar, Ryan Tseko, Executive Vice President of Cardone Capital, said real estate investors would likely see deals ranging between $20 million to $150 million.
"I think it's going to be a Robin Hood moment. In the next 12 to 18 months, I think there are going to be fantastic deals. In that sweet spot of $20 million to $150 million, there's going to be some great opportunities," Tseko said.
Tseko attributed his prediction to the wave of debt set to mature on multifamily and commercial properties.
"I think now is the time to buy, especially if you're going to hold onto these assets for the long term. The higher and longer the debt is up, the better deals you're going to see in real estate," he added.
With debts set to mature, Tseko said investors should consider capitalizing on lucrative opportunities in the real estate sector, adding that there are substantial gains to be made.
Real Estate Loan Maturity
At least 20% of the $4.7 trillion of outstanding commercial mortgages are set to mature this year. This amounts to $929 billion, per the Mortgage Bankers Association. Roughly 60% of the debts are also due by 2027.
"Volatility and uncertainty around interest rates, a lack of clarity on property values, and questions about some property fundamentals have suppressed sales and financing transactions," Jamie Woodwell, head of commercial real estate research at MBA, said in a statement.
By property type, multifamily properties account for the largest share of maturities, exceeding $1 trillion. At least 12% of those will mature in 2024. Among loans backed by office properties, 25% will come due by 2024, as will 38% of hotel loans and 27% of industrial loans.
Last year, $541 billion in debt backed by office buildings, hotels, apartments, and other commercial real estate properties came due. It was the highest amount ever recorded for a single year, according to the Wall Street Journal.
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