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Time For The Commercial Meltdown To Begin ??
A while back I wrote about how I was concerned that the coming collapse in the commerical real estate market would make the residential meltdown look mild in comparison. While I would be quite happy to be wrong about this I think the first shoe has dropped with the bankruptcy of a major mall owner.
When you combine a slow economy with lots of major anchor renters dropping out the future does not look particularly bright. I’ve discussed it with other folks in the bankruptcy world and few of us see a bright future if this trend continues.
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7 Responses to “Time For The Commercial Meltdown To Begin ??”
From what I understand, CRE is usually the last major shoe to drop in a recession…and the last to pick up again. It falters because anchor retailers are losing customers who are losing homes and losing jobs from employers who are losing credit from banks that have lost the ability to assess risk. Once prices of residential real estate bottoms out, people will buy homes, and take out loans from banks that will have greater profits, and will be encourage to lend again to small businesses, which will begin to ramp up production, and hire new employees, who will have money to shop at retail stores that pay for commercial real estate.
The link is busted. Try this?
I think the economic problems we're having are weird enough that it's ahrd to say if they're going to follow a normal pattern.
Elrod:
As an “optimaslist” on our economy, and a non-economic-financial expert, your tenet that CRE is usually the last major shoe to drop, is for sure good news to me, and hopefully for our economy.
Just as a casual observer, and from observing the unbridled malls, shopping centers, restaurants, etc., construction and development that has taken place in my hometown during the past few years—totally out of sync with a much smaller population growth–I can not help but to wonder if a lot of this CRE problem is not self-inflicted.
But those smelly minorities got credit lines they couldn't repay. /end snark
Mnay businesses abused the easy credit with stupid debt loads. The owners of the Tampa Bay Buc's are paying 14% interest on the loan for the UK soccer team. But, only lazy minorities and Fanne Mae are responsible…
I hope this is Friedman's mall, welcome to 'your' 'Flat Earth”…
Click here if interested…
Great info, keep up the good posts!…
Tampa coastal homes info…
Good job narrowing down all the information…
Tampa coastal real estate info…
Great post…