Merrill's Former REIT Analyst Steve Sakwa Dispenses Some Unexpected CRE Pessimism
Steve Sakwa, who we may have had some harsh words for in the past, primarily during his Merrill Lynch tenure, shares some perspectives on Commercial Real Estate. His observation:
"From a financing standpoint things are far worse; from a fundamental standpoint things are certainly getting worse."
We are happy that now, at his new employer International Strategy & Investment Group (where he presumably does not have a mandate to whisper sweet optimistic words, and upgrade every firm that ML does a follow-on offering for), Steve is finally allowed to disclose his true feelings on the space, which many have written off as a risk threat simply because "everyone knows it is the next shoe to drop." Well, that's great, but unfortunately that doesn't change the fact that it is as "contained" as Residential Real Estate was presumably contained, and continues being a massive black hole for taxpayers years now after that particular bubble has burst. Although the solution, as we all know, is merely printing a few hundred billion dollars and throwing them at the problem. Why tinker with the dollar devaluation status quo if it is (still) working so very well?