Reflections on Real Estate

EAST RUTHERFORD, NJ-While much has been made about the cyclical nature of the commercial real estate industry, the current slowdown does not fit the historical model, at least according to Donald P. Eisen, an executive managing director at Cushman & Wakefield.

“The last two downturns were very much related to the commercial markets getting out of balance. Each time, it took four or five years to work through,” Eisen says, adding that these earlier cycles correlated with business expansions and contractions. This time, however, it is different. “The last business expansion was the result of easy credit,” he says, “and the fallout is a pandemic–it is across every piece of the financial community. It includes every facet of real estate, having started in residential and made its way through office, industrial, retail and multifamily. The failure of our whole financial structure globally makes this the granddaddy.”

According to Eisen, when the industry rebounds, things will have changed. “We are going back to basics and we can expect to see a huge de-leveraging of our society. Moving forward, if you want to buy a piece of property, you will have to use some capital,” he says.