The commercial real estate bust is going to be legendary. We are talking trillions of dollars. The attention of Americans is being pulled away by massive market volatility that has seen the S&P 500 shoot up 44 percent in four months. Yet the U.S. Treasury and Federal Reserve have kept their eye on this market and have started examining a “Plan C” focused on bailing out this industry even before major problems occur. The new preemptive doctrine of bailouts. That is, they want to saddle the taxpayer with further burdens on some of the most speculative bets known to humankind.
First, it is certain that commercial real estate will have problems. If we examine certain vacancy rates, we see that they are already starting to creep up: (chart above)
The above chart is merely reflecting the deep contraction in the real economy. Businesses are needing less and less of that plentiful office space that is floating in the market. So much for the dream of an Eames Lounge chair sitting in your office space, entertaining clients while the $5,000 monthly lease payment sits on your mahogany desk. On the other hand, if you are looking for retail space you will find some room to negotiate.
Link
ARIZONA DESPERATE! Selling buildings
Link
Whew...our office space is over $9,000 per month, but we're moving out of there soon to office space that will be more cost effective, without layoffs in our dept. Sadly, the LA Times reported on July 28 that over 82,500 appeals cases for unemployment benefits are backlogged in California, and may not be addressed until Feb 2012. This is a good blog site, providing info that isn't necessarily seen in the mainstream media.
ReplyDeleteThe commercial real estate bust is no BS. You can smell it in the air. My buddy owns various small office buildings and he said leasing them out right now is like pulling teeth. He has to discount the rates, makes the terms short, some month to month.
ReplyDeleteIt seems like everyday there are more for lease signs out there. Of course YOU can see them, just not on your TV news.
As for the Arizona state buildings, this is an example of state goverment going to the banksters for survival. The banksters will buy the buildings and lease them back to the government for big profits. When state government defaults the banksters will make sure to have a Plan B.
ReplyDeleteThis is what will happen with many, many more state government assets. Buildings, parks, schools, utilities.
The Federal government is doing the opposite. Taking over private businesses. Fascism = government controlled capitalism.
Let us all wave goodbye to the USA and welcome the USSA.
The banks get money at 0% from the Fed and buy these state buildings with their free money. Then our tax dollars pay the lease payments with interest/debt.
ReplyDeleteGot to love the banks, smart SOBs are tapping into free revenue from every crack and corner.
It's VERY obvious that the commercial real estate market is collapsing. Who would think otherwise? Stores are closing left and right., even in high traffic areas of New York City. The only survivors thus far are the deep-pocket chains. All else is closing shop. Ths is the SECOND wave and it's going to hurt very badly. This is going to manifest as the SECOND WAVE of the financial tsunami.
ReplyDeleteFOR LEASE due to increase piece by piece until nothing is left but the meese.
ReplyDeleteA lot of people confuse the stock market paper fake world with the US economy as a whole. They are not the same. Not that the USA economy itself isn't based on a house of cards, a huge Ponzi of exported fiat currency.
ReplyDeleteOh it's going to get a whole lot worse when you factor in all the Alt-A and Pay Option Arm real estate going belly up starting about now. Turns out a lot more bad loans were written on Alt-A than SupPrime due to a loophole about documentation if a second loan was taken to fund the 20% down requirement.
ReplyDeleteThe Alt-A implosion is scheduled to start about NOW and continue through 2012 or thereabouts. Eventually this economy will be so bad even Prime will be totally rotten to the core.
Loopholes get your Loopholes while they're hot!
Hey Admin, the commercial paper market is so bad Walmart had to float a recent bond offering in YUAN. Now there's talk this is a precursor to the USA floating Treasury Bonds in YUAN to be called 'Tiger Bonds'.
ReplyDeleteThe rate of return on these bonds will be an interest rate plus whatever the current devaluation of the dollar to the yuan is from when the bond was issued. In other words, it could be 8 billion percent.
No wonder there are a lot of office spaces around. I've been looking for an office space in Dulles, VA, which is near the airport. Besides that, it's also near my home. If I can't find any space there, I can still look for an office space in Reston, VA. Well, I live near those two places. Another good choice would be a place near the nation's capital. Those two places I've mentioned are close, but it's better if we get a place in the capital itself. Thanks for the heads up! I have to plan this carefully with my colleagues.
ReplyDelete