The Los Angeles Business Journal reported earlier this June that amidst the Covid-19 pandemic, many real estate developers are actually being presented with some unique real estate opportunities, even as the US economy has come to almost a complete halt. Historically, real estate has been one of the most resilient industries and is uniquely positioned to survive economic downturns. Real estate typically is not as affected in market changes as much as other industries, such as equities. According to LABJ, the companies open to exploring these opportunities are drawing their experiences from those of the Great Depression, and are figuring out ways to spin the financial crisis into a positive. Many are on the lookout for distressed and struggling properties. For some, such opportunities can come from unexpected sources such as retail and hotel properties, in which they can acquire the asset at a much better price. Hotels across the nation are struggling to meet target occupancy rates and fill vacancies, with the industry as a whole set to lose hundreds of millions before year end. “Usually, the opportunity comes in places that are getting hurt. Right now, it’s the sector in the market that is getting hit the worst,” said CGI Founder and CEO Gidi Cohen, who believes that the return on investment can come as soon as two to three years from now, when the industry snaps back.
Industrial, office, and multifamily properties, usually regarded as safer assets, are also on the horizon for CGI Strategies. Cohen noted that the LA market is currently a tougher atmosphere due to the political uncertainty, but added that CGI is interested in buying, looking at location, replacement costs, and the value of assets now and in the future, particularly in the Southeast.
Read the full article here: https://labusinessjournal.com/news/2020/jun/08/bargain-hunters-distressed-market-opportunities/