“If you look back at two-plus years ago, investors, lenders and others were completely shying away from retail as an asset class,” Woodwell said. “There was sort of a pall over retail. And then over the last couple of years, investors, lenders and others have really come to differentiate the types of retail that they are maybe less comfortable with and the ones they’re very comfortable with.”
He gave an example of the latter: “Grocery-anchored centers now are highly sought after,” he said.
Multifamily is another bright spot
Multifamily is also bucking the trend, despite market forces that have corroded the office space. “There is still a great deal of optimism and faith in the multifamily space market,” Woodwell said. “There’s a lot of new supply coming online, and that’s impacting rents in markets. But from a loan perspective, it continues to perform quite well depending on when that property was first purchased or last financed.”
He explained the difference: “If it was purchased or financed 10 years ago, its value is 160% up from where it was 10 years ago,” Woodwell said. “There’s a lot of equity that’s been built into that. If it was purchased recently, it hasn’t seen the same level of appreciation. So again, different properties are in very different situations, depending on their particulars.”
In short, it’s the spring of hope and the winter of despair – all depending on where one traverses along the CRE landscape. Yet on balance, it’s an epoch of incredulity – with apologies to Charles Dickens.
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