In markets like Dallas, Austin, Denver, Salt Lake City, Seattle, and Los Angeles the 6-Month Treasury is already > the Cap Rate.
Meaning there is very little incentive for investors to be in these markets. Especially now that prices are going down.
— Nick Gerli (@nickgerli1) September 14, 2022
Making matters worse: many Wall Street Real Estate Investors fund their strategy using Floating Rate Credit Facilities.
So every time the Fed Hikes Rates, their cost of capital on their EXISTING portfolio gets more expensive.
— Nick Gerli (@nickgerli1) September 14, 2022
What many people will soon realize is that this "experiment" of Wall Street buying Homes was never meant to last.
They piled in, earned their fees, and will now look to exit as quickly (and quietly) as possible before the Crash gets bad.
— Nick Gerli (@nickgerli1) September 14, 2022