I’m worried about a significant decline (or crash) in commercial real estate valuations, specifically including multifamily, in 2023 and 2024. I feel that the red flags are so clear and all pointing in the same direction that I’d be neglecting my duty to this community to fail to make my stance as clear as possible and to defend that stance in great detail. 

In this article, I’ll walk through my thesis, outlining four primary threats to multifamily valuations, following the summary below: 

• Part 1: Cap Rates Are Lower Than Interest Rates 
• Part 2: I’m Not Betting On Meaningful Rent Growth In 2023
• Part 3: I’m Betting On Interest Rates Rising In 2023
• Part 4: High Interest Rates Put Pressure On Valuations And Debt Underwriting
• Part 5: News, Anecdotes, And Further Reading
• Part 6: Ideas To Protect Wealth And Make Money In This Environment

Please note that real estate is local. My analysis in this article is reflective of the average across the United States, though I do dive into a couple large regions. 

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