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Real Estate Investment Liquidity Risk

Blog by Andrew Reid | February 23rd, 2021

During market downturns, access to capital dries up and buyers vanish. The liquidity risk is that property owners must place a discount on their property's value to sell it during market downturns.


Have adequate cash reserves and avoid excess leverage, so that the holding corporation is not forced to sell during a cyclical downturn when buyers vanish, and the only way to liquidate the asset is at a fire-sale price.