TAMPA - The weakening commercial real estate market is braced for a bust that experts say could cause even more damage to the local economy than the housing collapse.
"Any projects built in the last five years, especially those built near new residential developments, are at risk," said Shari Olefson, a Tampa real estate attorney with Fowler, White and Boggs. "I'm hearing from a lot of owners who just want to walk away, just as homeowners are turning over the keys."
Florida cities already are among the nation's hardest-hit by home foreclosures. Similar problems in the commercial real estate market would cause the recovery of the economy to take even longer. That's worrisome because estimates call for the commercial real estate market, valued at about $6.7 trillion nationally, to see half of its loans due over the next three years.
At the same time, U.S. banks have been charging off soured commercial mortgages at the fastest pace in nearly 20 years, according to a recent analysis by The Wall Street Journal. At the current pace, losses on loans to finance offices, shopping malls, hotels, apartments and other commercial property could reach about $30 billion by the end of 2009.
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where all the mallrats going to go?
ReplyDeleteIn fairness, how much of CRE was speculative this go round? How much of it was purchased between 2005-2007? Therein will lie a clearer picture. Deals that were purchased in 2000, refi'd in 2005 and due again in 2010 are probably not in much trouble, unless the vacancy issues are not allowing debt coverage. Deals that were made and financed the first go round in 2005 are most definitely going to have to come up with equity or risk giving the property back to the bank. Its worrying, no doubt, but I am not convinced Armageddon is coming....yet.
ReplyDeleteThe economy is dead.
ReplyDeleteLike Bernie. They are moving the arms up and down, back and forth, but he is dead.
As long as they can convince the sheeple that Bernie is alive, the fake BS will continue indefinitely. As will the continued looting of the taxpayers by the Fed owners. Until there is absolutely nothing left of Bernie but a skeleton.
I'm waiting for Hot Topics 'going out of business sale' to stock up on Skull shirts and leather pants. Woohoo!
ReplyDeleteHot Topic going out of sale would be awesome. I could stock up on those little sexy outfits for my wife.
ReplyDelete