'It's going to be ugly': This CEO issues a dire warning about US real estate, saying areas will be 'destroyed' — but he still likes this 1 niche. What it is and how to invest

“The party’s over, unfortunately,” he said. “The office market’s going to be destroyed, hotels are going to be destroyed — it’s going to be ugly.”

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A dire warning for commercial real estate

Carroll is not the first — and certainly won’t be the last — to ring the warning bell for the commercial real estate sector.

Since the collapse of Silicon Valley Bank in March, experts have raised concerns about the mega $1.5 trillion wall of debt looming for U.S. commercial properties.

That mortgage debt — which is held mostly by small- and medium-sized banks — comes due for repayment before the end of 2025.

“No lender is willing to lend because they don’t know where interest rates are going,” Carroll said.

Carroll added offices are experiencing “a double whammy” of misery and he described the sector’s fundamentals as “terrible.”

“After COVID, people worked from home. The work week is now Tuesday to Thursday — so, people are taking less office space, no one wants to lend on it … it’s a disaster,” he said.

Real estate safe haven?

According to Carroll, there is one real estate niche that is riding out this wave: multi-family real estate.

In contrast to commercial real estate, the multi-family market has “strong fundamentals,” says Carroll, whose real estate investment firm manages more than 33,000 multi-family units across nine states.

“I talked to one of the biggest landlords in the world yesterday and what he’s telling everybody is: ‘Stay alive ‘til ‘25.’ Right now, our fundamentals are great, people are paying rents [and] the market is healthy,” he said.

Read more: Warren Buffett gets gloomy: America's 'incredible period' is coming to an end. Here's what nervous investors can do right now

Because of sky-high property prices and mortgage rates, renting has become the only option for a lot of Americans.

“This has all kind of been a perfect storm for the multi-family business,” Carroll said in an interview with Fox Business last summer.

If you’re keen to invest in multi-family real estate, here are two ways to get involved.

Invest in residential REITs

Investing in a residential real estate investment trust (REIT) is a way to profit from the real estate market without having to buy an actual property and manage tenants.

REITs are publicly traded companies that own income-producing real estate like apartment buildings, shopping centers and office towers. They collect rent from tenants and pass that rent to shareholders in the form of regular dividend payments.

Here are two multi-family REITs you may want to check out.

Camden Property Trust (NYSE:CPT) owns, manages, develops and acquires multi-family apartment communities. As of March 31, it owned and operated 172 properties containing 58,702 apartment homes across the U.S.

With a market cap just shy of of $12 billion, Camden has a diverse portfolio of assets with a focus on high-growth markets (in terms of employment, population and migration).