Steven Moore -Managing Director, Causeway Advisors, LLC

Understanding the intricacies of distressed commercial real estate investing

Steven Moore - Managing Director, Causeway Advisors, LLC

In the current climate of the real estate market, it's not greed but fear that's driving the Great Real Estate Reset narrative. In this episode of The Real Estate Reality Show, I sit down with Steve Moore from Causeway Advisors to discuss the impact of this fear on the market, particularly in the realm of distressed assets.

This is a quick recap of what we discussed:

  1. Current fears are largely driven by the rising funding costs and operational distress, making it challenging for real estate sponsors, especially those who lack experience in managing through difficult times.
  2. This fear-induced behavior is causing a slowdown in the market, affecting future growth and investment, and leading to distress for some sponsors - but also opening up opportunities for others.
  3. Steve predicts a brighter outlook by 2025, with expected interest rate reductions throughout 2024 that will benefit the market. This could potentially trigger a resurgence in investment activity and a more stable market environment.
  4. Despite the challenges in obtaining equity, there are still opportunities to be found. Steve highlights the potential in distressed assets, such as mid-construction projects that have stalled due to lack of funding, and real estate holdings of executives from failed banks needing liquidity.
  5. There are also opportunities in the form of assets being sold out of bankruptcy to fund cash-flowing shortfalls. These distressed opportunities require a different approach compared to buying marketed properties during an upmarket.

Join us in this episode to hear Steve's perspective on where we're heading in the next few years, and how sponsors can navigate through the fear and seize the opportunities that lie ahead.

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