Wilbur Ross – who became known as the “King of Bankruptcy” earning billions on his ability to restructure failing companies – said today that the US is about to enter into a “huge crash in commercial real estate”.
“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate – the return that investors are demanding to buy a property – are going up.”
The sentiment is clearly shared by George Soros who made billions investing in currency and stocks, who said in a lecture today that a “bloodletting” may be coming for leveraged buyouts and commercial real estate.
“The American consumer will no longer be able to serve as the motor for the world economy,” said Soros, while addressing a lecture at the Central European University in Budapest.