Matt Pomeroy, Director of Valuation, Reporting, and Analytics for Chatham Financial, discusses the challenge of determining accurate valuations when the market is essentially frozen in place. Without comparable trades, how can investors know what they have?
https://www.afire.org/podcast/202307cast/
Fast rising interest rates and fast shrinking demand for office space is a significant challenge for real estate portfolios. Bid/ask spreads have widened to the point that only the most distressed sales can take place. Valuation of real estate values has always depended on comparable trades but what happens when there are almost no trades?
Public real estate markets suggest that values have dropped by more than 20%, but in private markets, it is difficult to determine exactly what a portfolio may be worth at this point in time. What is an investor to do then, besides wait?
According to Matt Pomeroy, Director of Valuation, Reporting, and Analytics for Chatham Financial, it’s “ill-advised” to simply do nothing.“
Pomeroy sat down on April 11, 2023 with AFIRE CEO and podcast host Gunnar Branson to discuss how the industry can find new and better ways to adjust values without comparable transactions.
