BY ANDREW LITTLE, Special correspondent – November 19, 2017
Singer David Johansen, aka Buster Poindexter, probably wasn’t thinking about commercial real estate when he sang one of his biggest hits, “Hot, Hot, Hot.”
But the title to that hit song accurately describes the current state of the commercial real estate market. The ongoing strength in the sector can be attributed to cheap and available capital.
The conduit market,
Pop rock songwriter P.F. Sloan wrote the quintessential anti establishment tune in 1964 and Barry McGuire made it famous in 1965 singing the lyrics “You don’t believe we’re on the eve of destruction” as it reached No. 1 on the charts.
Although most political observers would conclude the song applies to today’s state of affairs, “Eve of Destruction” would be an overstatement for most commercial real estate players.
Stephen Stills of rock band Crosby, Stills and Nash released a single in 1970 that implored listeners to get over the anger of being jilted by your true love and “Love the One You’re With.”
New wave band the B52s could have been talking about today’s commercial real estate market in their 1980 hit “Party Out of Bounds” when they questioned: Who’s to blame when situations degenerate?
After years of everincreasing commercial real estate sales volume and evercompressing cap rates, the party seems to be on the verge of ending — but why?
By most fundamental measures,
Singer Joni Mitchell wrote and recorded “Big Yellow Taxi” in 1970, which became an antigrowth anthem for many environmentalists with its famed line “they paved paradise and put up a parking lot.”
While she most assuredly wasn’t thinking about lenders of commercial mortgage backed securities when she wrote the song, those investors should consider the line “don’t it always seem to go that you don’t know what you’ve got ’til it’s gone” as they tighten the screws on conduit lenders.