Commercial Real Estate the Next Bailout?
With all the focus on residential real estate, very little attention is being paid to the commercial real estate market.
In a report by the National Association of Realtors, it said in part:
The fundamentalists in commercial real estate are feeling the stress of a slowing economy and troubled credit markets. Job growth, particularly in office-using industries, has been declining. Vacancy rates are expected to rise in all sectors due to decreased demand. The financial decline is squeezing credit availability for commercial projects. As a result, transaction activity is down over 50 percent compared with last year.
With the economy in a trail-spin, it seems that almost daily we hear about major retail stores going out of business or closing many stores. This is the major problem for commercial real estate. If 'anchor' stores in shopping centers close, the 'traffic' to an individual center is drastically impacted. Therefor, the impacted centers' smaller, remaining tenants, could see their sales drastically decline. Thus, not only the value for an entire shopping complex can be affected, but it's very existence could be at stake. San Diego income property
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OK People, for those too dopey to attend Freshman Economics: Since 2001, the Federal Government has created a deficit of $3 Trillion. We’ve devalued the dollar and borrowed money from China; thus creating an inflationary, recessionary economy. While interest rates were artificially low, people borrowed mortgage money at the going rate. Mr. Berneke and his buddies created this situation and now they need to fix it. $25 Billion is only 2.5 months of budget for the Iraq war. Small potatoes.
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