Commercial Real Estate Market Trouble
The commercial and industrial real estate sector is continuing its own struggle this summer. The lack of jobs, and funding for new businesses are expected to contribute to another long, stagnant year for commercial property.
Commercial real estate buyers are looking for leases rather than buying. Plus, a lot of them are just looking and don’t want to do anything for another six months or so.
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Commercial Real Estate … Shopping Center Vacancies Increase
commercial real estate
According to research firm Reis Inc, the vacancy rate in U.S. strip centers during the second quarter rose 0.10 percentage point from the first quarter to 10.9%, slightly below the 11% in 1991 during the prior real estate bust, according to the Reis quarterly report, released last week. Retailers gave up 1.85 million square feet of occupied space in the second quarter at neighborhood shopping centers, while developers opened less than 400,000 square feet of new strip mall space. That compares with an average of about 7 million to 8 million square feet of shopping centers built each year from about 2001, according to Reis. Read more 
Commercial Property Values Head South Again
San Diego commercial real estate
Moody’s Investors Service reported last week that its index for commercial property values fell 2.6 percent in February. It was the first decline recorded by the company in four months.
The drop pushes the Moody’s/REAL Commercial Property Price Indices (CPPI) 42 percent below their October 2007 peak. The ratings agency says commercial real estate values are down 26 percent compared to just a year ago. Read more
Has the Commercial Real Estate Market Bottomed?
CNBC Squawk on the Street – Has the Commercial Real Estate Market Bottomed?
Orange County California real estate lawyer
Commercial Real Estate – Storm Clouds Ahead
commercial real estate
Many insiders believe approximately 55% of the $1.4 trillion commercial mortgages that will mature in the next five years and are now underwater.
About half of all commercial mortgages sit on the balance sheets of smaller regional banks.
This why the FDIC is in the process of setting up a vary large office in the Chicago area, to handle the expected bank failures in the Mid-West.
Commercial Real estate Problems
Goldman Sachs recently raised its estimates for total losses on commercial mortgage loans to $287 billion, of which %180 billion, or 63 percent, will be absorbed by commercial banks.
But vacancies have been rising sharply, especially for apartments, retail and industrial space. Goldman Sachs now predicts that asset prices will fall in the range of 40 percent on average. Rents are dropping at a 9 percent annualized rate, the worst decline on record.