Commercial Real Estate: Now Is the Perfect Time to Invest

by David Fessler, Energy & Infrastructure Expert

Back in April, I wrote a column detailing the looming train wreck in the commercial real estate market.

It turned out to be a rather controversial piece.

How controversial? You can judge for yourself here in my April column: The Commercial Real Estate Sector: As The Other Shoe Drops – Be Wary of Bank Stocks. It was groundbreaking enough to land me a spot on Glenn Beck’s show on Fox News.

Virtually nobody else was talking about the topic and a number of readers e-mailed to tell me how daft I was for even mentioning it. But I sensed the mess coming a mile away.

Right now, commercial real estate is in the gutter. It’s where the banks were last March. No one wants to touch the sector in any form.

But I think it’s time to jump back in.

And before you think I’ve sucked down a little too much holiday eggnog, hear me out…
A Contrarian Bet Worth $9.5 Billion

I’m in good company with my projection here.

During last February and March, a hedge fund called Appaloosa Management was busy buying up shares of Bank of America (NYSE: BAC) and Citigroup (NYSE: C).

And the guy calling the shots was a man named David Tepper, who runs the fund.

At the time, investors, colleagues and even his friends thought he was nuts – a move akin to lounging on the deck of the Titanic while everyone else was abandons ship.

But in yet another example of how it’s often wise to take a contrarian investment stance, the bet not only paid off handsomely for Tepper’s firm, but for Tepper personally. Appaloosa is up nearly $7 billion on the trade, while Tepper stands to pocket a very cool $2.5 billion in profit for himself.

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