The Open Secret in Commercial Real Estate Is That Owners Regularly Take Cash Out of Properties — Here’s a Look at How Much
Partner, Executive Committee Member and Co-Chair of Real Estate Litigation & Dispute Resolution, Scott Tross, was quoted in an article in MarketWatch on commercial real estate owners taking cash out of their properties.
“The real-estate industry is all about taking cash out, and on a tax-deferred basis, at that,” said Tross. “That’s nothing new. But in may respects, what’s happening now is reminiscent of what happened ten years ago or so.”
By that, Tross was referring to the global financial crisis in 2007-2008. “You had people borrowing as much money as they possibly could, none of it on a recourse basis. And if things move in their direction, that’s great,” he said. “If they don’t move in their direction, they just hand back the keys.”