Peter Pays Paul

Inside commercial hard money lending.

19 Nov

Calculated Risk: More Bad News for Commercial Real Estate

Category: Commercial Real Estate, Credit Crisis

There are a couple of key points:

# as vacancies are rising, rents are falling – and any commercial loan based on a overly optimistic (added) "pro forma" analysis is in jeopardy of default.

# new non-residential investment in offices, malls and hotels will slow sharply.

As example, in Chicago there are several new buildings just being finished:

Adding to the vacancies, three major developments are due for completion next year, flooding downtown Chicago with another 3.6 million square feet of office space.

But the good news for landlords – and bad news for construction related businesses – is there are "no new office buildings on the horizon for 2010 and only one … planned for 2011." This fits with the Architecture Billings Index released earlier today.

Calculated Risk: More Bad News for Commercial Real Estate.

Tags: Commercial Real Estate, Credit Crisis


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Posted Wednesday, November 19th, 2008 at 6:04 pm
Filed Under Category: Commercial Real Estate, Credit Crisis
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