Many homeowners, lenders, and investors suffered a severe loss during the housing market crash of 2007. Others found an opportunity. They were buying, not selling. Why? Because, as every wise investor knows, the market eventually recovers. Sometimes it can take years for that to happen, but the payoff is often worth the risk. Now hedge funds are preparing for the next big market crash; only this one involves commercial real estate. Could it be the next big payoff for investors? Perhaps. The following explains more.
The Perfect Storm
Retailers, big box stores, and malls have been struggling for some time now, but many have managed to hang on, if only by a thread. Unfortunately, it appears they could be in for the perfect storm in this upcoming year. Expert analysis shows that approximately $3.5 billion in retail loans were consolidated in 2016.
Malls, which are reliant on these retailers and the foot traffic they bring, have started struggling as well. The more the malls struggle to bring in business, the more stores that close – and so goes the cycle of devastation. It is this cycle, paired with topped out commercial real estate prices, which has experts believing the market is about to crash. Those same experts are ready and waiting in the wings, hoping to cash in on the misfortune of others.
Investing During a Market Crash
Although it is possible to turn a profit by procuring distressed properties, there is also a significant amount of risk involved. Understanding these risks, including what they are, why they exist, and how to mitigate against them, is crucial to successful investing. Unfortunately, because each market is varied, each property is unique, and each investor’s vision is different, blanket statements are ineffective at guiding those who hope to bet against the market. Thankfully, a commercial real estate lawyer may be able to help.
Benefits of Hiring a Commercial Real Estate Lawyer
Commercial real estate lawyers are not always necessary, but they are always advised. Not only can they assist you with the legalities, such as closing and due diligence, but they can also help in weighing the pros and cons of a potential property.
Learn more by contacting Stock, Carlson, Oldfield & McGrath, LLC. Committed to your best interest and financial future, our DuPage County commercial real estate lawyers offer seasoned advice and sound legal counsel. Schedule your personalized consultation by calling 630-665-2500 today.