By Shanthi Rexaline
The commercial real estate market is hanging on the edge of a precipice, thanks to higher interest rates and an uncertain economic environment.
“Rich Dad, Poor Dad” author Robert Kiyosaki is the latest expert to issue a stark warning about it.
Kiyosaki, a proponent of gold, silver and Bitcoin (CRYPTO: BTC), said late Wednesday that he is bracing for the “greatest real estate crash ever.”
Underlining the severity, he noted that “2023 will make 2008 GFC look like nothing.”
The great financial crisis of 2008 was the handiwork of a real estate market collapse which then precipitated a financial crisis. Financial institutions, which held exotic instruments such as mortgage-backed securities tied to real estate, saw a collapse in the value of these instruments and saw their fortunes suffer. Lehman Brothers fell victim to the crisis and its bankruptcy led to an international banking crisis.
Kiyosaki noted that office towers in San Francisco, which were once red-hot, have lost 70% of their values in 2023. “What will woke cities do with office buildings? Homes for the homeless,” he said.
He signed off his signature recommendation to buy gold, silver and bitcoin.
Kiyosaki’s warning is not an isolated one. Tech investor David Sacks highlighted the looming crisis in a recent tweet, also taking the example of San Francisco, along with Los Angeles. Responding to his comments, Tesla CEO Elon Musk said, “Commercial real estate is melting down fast.” He also said house prices will tow in line next.
Shark Tank star Barbara Corcoran in an interview with Fox News recently highlighted the plight of commercial real estate properties. Many of these are staring at the prospect of foreclosures, she said, adding that “No one has the confidence to buy it now. No one really believes it’s going to turn the corner.”
In midtown Manhattan, the occupancy is only 50% and in secondary cities, the vacancy rate is 20%, she noted. “I don’t see that turning around. I think it’s going to be a bit of a bloodbath before it gets better,” she added.
Source: Published without changes from Zenger News