Are you wondering why the grass is not being mowed in your city this summer, or services that you took for granted are disappearing? One thing you know for certain is that your property tax bill is not going down even as your property values are shrinking.
Where is the money going?
Most likely, it is heading off to Wall Street as speculative investments made by cities like Springfield, Missouri are sucking the life out of towns and cities across the country. Securitized investments in commercial real estate boondoggles or commercial deals that are declining rapidly in value. And these cities pension funds are the ones holding the bag.
One of the pension fund’s problems: It’s an investor in a $1.1 billion speculative office skyscraper rising in New York’s Times Square in the middle of a commercial-property bust.
That folks in places like Springfield wound up owning a piece of one of the biggest real-estate gambles in America is indicative of how widely today’s commercial-property collapse has spread. Some in the industry believe the damage will be deeper than the previous crash of the early 1990s.
The sector’s woes are considered a major threat to economic recovery. There is some $3.5 trillion in commercial-real-estate debt outstanding — more than the amount for auto loans, credit cards and student loans combined. And the default rate is rising sharply.
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My city is still mowing the grass but not for long. The budget is in trouble. I could never understand why the politicians can never think ahead.
There are still people buying & selling & leasing commercial real estate in Springfield, MO. The market may have changed, but there are great spaces for rent, stunning offices for sale, and investment opportunities to be had. Take advantage and talk to your local Realtor today.