FICC Focus FICC Special: Harbor’s Litton Talks US Commercial Real Estate
11 snips
Dec 11, 2025 Richard Litton, President of Harbor Group International, dives into the current state of US commercial real estate. He discusses the anticipated stabilization in 2026 and the challenges of loan restructuring amid an affordability crunch. Litton emphasizes the significance of location in the office market recovery and identifies strong demand in the multifamily sector, especially in the Sunbelt. He also highlights the risks of economic softness and inflation while outlining opportunities in niche markets like student and senior housing.
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Preferred Equity Play On Lexington Ave
- Harbor bought a Class B Manhattan office near Grand Central via preferred equity after a lender forced a short sale.
- They avoided senior debt to limit pressure and prioritized first-position structured equity for upside control.
Office Is Building-By-Building
- Office performance remains highly granular and building-specific, not market-wide.
- Litton warns that location and functional obsolescence determine short-term leasing outcomes.
Multifamily Benefits From Housing Shortage
- Multifamily fundamentals benefit from a U.S. housing shortage and falling new-start permits.
- Litton views cap-rate expansion and lower debt costs as improving the buyer risk-reward dynamic.