Hillwood founder and chairman Ross Perot Jr. was on Bloomberg Markets this week, talking about the future of the commercial real estate industry. The outlook? Not so rosy.
When asked about how banking jitters and financing woes have affected commercial real estate, Perot didn’t mince his words. “The key to commercial real estate today, though, will be banking,” Perot said. “If the industry can’t get a construction loan, real estate will have a recession,” said the 64-year-old real estate developer.
Between fluctuating asset values and the credit crunch, the commercial real estate industry is facing headwinds. In fact, this has led Perot and his companies to finance real estate projects themselves in the tighter financial conditions. “They would not come to us if they could go to a bank,” Perot told Bloomberg. “That is why we will have a real estate recession if the banks do not start lending.”
Perot also talked about the relative strength of Dallas-Fort Worth in recruiting companies to the region:
We’ve been fortunate to bring a lot of great companies to Dallas-Fort Worth. Charles Schwab out of San Francisco came to the Alliance project a few years back. We just moved Caterpillar out of Illinois down to Dallas-Fort Worth and into one of our buildings. And we’re working with Goldman Sachs on their new campus. So, we’re in the middle of this flow, and we’re seeing more and more clients starting to inquire on how to come to North Texas. We’re very optimistic on that.
See the full interview on Yahoo! Finance here.
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