"We have crazy commercial real estate construction in our town, far more than demand. Hot money chasing a return."
Same where I am. We bought the condo next door, and will absorb half of it into our existing one, and rent out the other half. Fortunately I don't need to make money on it, so I can undercut others, if necessary (which it shouldn't be)...BUT there is an enormous amount of rental housing being built around us, in the heart of downtown, by far the highest rent in the city.
There are literally dozens of big apartment buildings going up (hotels also), and only 1 condo building (there will soon be another by the same developer). I have inquired at some that are complete, and they claim 94-100% occupancy. Right. I can see into the units of one that claims 96%, and there's no way. Complete b.s. They are just scooping up RE and developing it, and hoping that their long-term plans pan out.
It's incredible what cheap money can do.