Some commercial real estate sectors could be in for dark days if housing values continue to fall and the U.S. economy deteriorates, the head of commercial real estate for Marathon Asset Management said on Monday.
"Hospitality and retail are probably the sectors that scare me the most," Scott Schwartz said at the Reuters Global Real Estate Summit in New York.
With the economy slumping and credit markets bearing down on real estate sales, many experts expect prices of commercial real estate to fall 10 percent to 20 percent from peak levels of last year, spelling trouble for investors whose businesses rely on consumer spending or the housing market.
"Retail -- obviously because you just don't know where the consumer is going to end up," Schwartz said. "But also you just had a tremendous amount of retail built up in and around all the single-family home development built in the last few years. Those are going to be real hard to lease up and keep leased."