Top Tier Selling, Your Tier Isn't

Posted by Daniel Jones on Mar 21, 2011 5:20:00 PM

The Recovery Will Be Bifurcated

These are the best of times for cash-rich borrowers and lenders, but they continue to be tough times for less well-funded borrowers and lenders. Just as the investment markets are bifurcated with top-notch properties in top-tier cities commanding escalating prices and lower tier properties and cities still fighting uphill climbs, so too does it appear that the capital markets are split between the haves and have-nots.

"There seems to be a dam that is keeping the flood of capital provided by the Federal Reserve from flowing to smaller real estate borrowers and properties," said Chris Macke, senior real estate strategist for CoStar Group. "Expanding the recovery in commercial real estate hinges on breaking this dam."

The split between cash-rich businesses and those in need of capital has set the stage for a bifurcated economy, with growing challenges for small- and medium-sized companies.

"Depending on where you stand, the debt maturity crunch ahead could either look like a crack in the pavement or the entrance to the Grand Canyon," Deloitte LLP reported in a new paper this week entitled: A Tale of Two Capital Markets...

http://www.costar.com/News/Article/The-Recovery-Will-Be-Bifurcated/127225

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