With the collapse and slow but steady recovery of the US Housing market one wonders what is next? The answer...Commercial is the next Blood Bath....There is an estimated $400 BILLION in Commercial loans due this year and an estimated $1.8 TRILLION coming due in 2012!
Commercial has been hit as hard or in some areas harder than residential with vacancies going up and more and more lease rates going DOWN....
The severity of this current situation may even eclipse the early 1990's says Richard Parkus of Deutsche Bank!
With that said if you own any Commercial Real Estate....hang on....It's going to be a WILD Ride....and if you have leases coming up and they want a lower rate and you can make it work....TAKE IT!!! The consequences may not be to promising if you don't....
I think we will see many more bank owned Commercial properties in the next couple of years....
First REO's on the homes....now REO's of Commercial Buildings....problem is....who is going to step in and purchase vacant commercial buildings with NO income??
In the residential market you can at least find a renter for a reduced rent...people have to live somewhere...not so with Commercial.....
To the recovery....sooner than later!!
Regards
Richard
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