... After 47 years as a consultant to the commercial real estate industry, Stan Ross is incredulous about what he sees unfolding in today's global financial markets and the troubled U.S. economy. "I've never seen anything like this."
Considering that in his professional career the 71-year-old Ross has witnessed real estate cycles dating back to 1961, that's saying something. Ross, based in Los Angeles, started as a partner in the consultancy of Kenneth Leventhal & Co., which merged with accounting firm Ernst & Young in 1995. He is now chairman of the University of Southern California's Lusk Center for Real Estate.
Ross notes that while previous cycles included relatively high unemployment and interest rates, today's recession is characterized by low interest rates and very limited liquidity in the marketplace brought on by a near collapse in the financial sector.
"In prior cycles we were able to refinance and even get new loans at a high cost," says Ross. "This time around if you have a loan that's coming due, if you're lucky you might get some interest by lenders in refinancing. But you also will be challenged by tighter underwriting criteria."...