“They think there's water, and they're going to keep walking towards lower interest rates. And when they get there and they are lower, they're going to find out that that's not even the real culprit.” Interest rate cuts might not provide CRE the relief it seeks. The real culprit behind distress, specifically in the multifamily sector, is that rents are flattening or declining in many markets while operating expenses are skyrocketing, Lynd said. When expenses like insurance rates and taxes rise, they rarely reverse course and go back down, even in a lower-rate environment, he added. Based on this conviction, The Lynd Group, a national multifamily owner, operator and developer, is smelling blood in the asset class, teaming with New York investment firm Declaration Partners to buy up and turn around distressed assets. Declaration had $2.2B in assets under management as of March. With billions of dollars in loans set to mature and some multifamily properties selling for cents on the dollar, Lynd said he thinks the next major distress cycle is right around the corner.  “They can't continue to extend and pretend,” Lynd said. “You can't keep telling the lie ‘everything's OK’ when the last round of mortgages that you quote, unquote worked out are still unworked out. Great, you kicked the can down the road on this billion dollars of loans. But what about the next billion coming due?” https://lnkd.in/eQ_PXhf5