The commercial real estate market has been in free fall the past couple of years. We think that residential real estate took a hit, but the commercial markets are down 44% since the peak in October 2007, a scant 26 months ago.
On a good note, declines are expected to slow down in the coming months. But the caveat is that tight lending markets are going to continue to impact the commercial real estate market. Since commercial debt is cyclical commercial borrowers need to refinance much more often than residential property owners.
2010 is shaping up to be a rough year for commercial real estate property owners.
he Moody’s/REAL Commercial Property Price Indices fell 1.5 percent in October from September to the lowest since August 2002. Prices were down 36 percent from a year earlier and are 44 percent below the peak in October 2007, Moody’s Investors Service Inc. said in a statement.
Values are dropping as U.S. unemployment climbs and consumers cut spending. Office vacancies may approach 20 percent next year as employers hold off hiring, commercial property brokers Jones Lang LaSalle Inc. and Grubb & Ellis Co. said last month. via Bloomberg
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Commercial lending is all but nonexistant around here right now, unless you have fourty to fifty percent down and perfect credit. We have quite a few properties sitting vacant as well and no great news about how they will get filled. Maybe a private investor will step up and fill the void.
I believe your prognosis about 2010 won’t happen
We’ve been hearing this all year, but it is so sobering to see it in print. I hope that the 2010 prediction is wrong, because it could make for another long year. Thanks for the info.
Good thing you have done here, Thanks!
Simon Salloom: LA Times: Southern California home prices and sales improve in November
Southern California’s real estate industry, decimated by the mortgage meltdown and housing bust, is stirring to life again — even making hiring plans — as home prices bounce back.
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