Real-estate expert Andy Miller presents the most dangerous exposures he sees in the sector today.I think the risk of rising interest rates far outweighs any reward present in today's market.
"No recovery in sight. As I have said many times, there is no recovery going on in real estate. However, I also don't see a great deal of erosion. Institutional buyers and funds are still gobbling up high-profile properties at very aggressive prices. This is having an impact on the market for all product types. However, rents are not going up; expenses are not going down; and vacancy rates are not being mitigated. Therefore, the underlying fundamentals of commercial properties are not improving. It sounds crazy to say that prices are high, but it is true. It is inexplicable, but true."