The COVID-19 pandemic has left no industry untouched. Jacob Frydman, a renowned real estate developer, and investor, recently shared on his blog how the pandemic has affected real estate. But rather than predicting losses, Frydman has encouraged potential investors to see this challenging time as an opportunity.
“There is a loss for some individuals, whereas others view it as an opportunity to invest in real estate projects,” Frydman posted on his official blog. The post goes on to explain how the pandemic presents a unique opportunity for first-time investors. Markets throughout the world are seeing their lowest points; however, many investors are seeing recovery on the horizon and investing in real estate companies that show great promise for future profit.
“The world’s biggest real estate investors are sitting on piles of cash, preparing for once-in-a-lifetime opportunities created by the pandemic,” explained Bloomberg’s John Gittelsohn on the Bloomberg Markets TV show. Similarly, an article on The Real Deal titled “Coronavirus distress is ‘opportunity of the century’ for real estate investors” points to firms such as Blackstone Group, Brookfield Asset Management, and Starwood Capital Group that are poised to take advantage of declining prices to grow the billions of dollars of capital they manage.
In the post, Frydman adds that timing is a perpetual source of risk for investors. They need to wait for the time when the price has reached its true bottom; however, sometimes their team isn’t running the right algorithms or looking at the correct data, and meanwhile, the market can and often does stay down for a longer period than expected – creating a lengthy delay for investors’ positions.
Enterprises such as hotels, restaurants, and commercial business complex owners currently face an extended period of the shutdown and are operating with limited reserves and very little business. Lessees are unable to pay their rent; mortgage holders are unable to repay their mortgages. Frydman writes that although some countries have come up with a moratorium plan to delay bank dues during the worst of the crisis, businesses in many countries are largely on their own to deal with this market upheaval. Some have learned from past market downturns and already implemented a plan of action, and many that have not been at the closing point. Others are seeking investors to provide a bridge until normalcy returns. Hotels, restaurants, and other travel-related industries are seeing valuations in decline around the world with no indication of improvement in the near future.
Jacob Frydman is a New York-based real estate developer who has invested and worked in numerous successful commercial real estate projects on the East Coast of the United States. During his long career, Frydman has appeared on television programs including CNBC, Bloomberg TV, and FOX News to discuss trends in commercial real estate. Know more from the Official website of Jacob Frydman.