CNNMoney: The commercial real estate time bomb

[marmar]

The commercial real estate time bomb
Posted by Carla Fried

July 20, 2009 12:24 pm


There’s a new main character moving to center stage in the great real estate meltdown. Underwater homeowners vying to refinance or score a loan modification have grabbed much of the headlines (and bailout attention) to date. But now commercial real estate is moving into the spotlight as the next potential body slam for the economy.

Last week The Washington Post reported that the U.S. Treasury department has begun to contemplate what can muck things up for the economy and the recovery beyond what is currently being bailed out. This effort has come to be known as Plan C. As in, “Yikes, Plan B might not do the trick, so what do we need to focus on next?”

Reports the WaPo, “The officials in charge of Plan C — named to allude to a last line of defense — face a particular challenge in addressing the breakdown of commercial real estate lending.”

The story line reads like a sequel to the residential debacle: Commercial property owners are sitting on loans that need to be refinanced. The Real Estate Roundtable estimates that about $400 billion a year in commercial loans will need to be refinanced over the next decade. .........(more)

The complete piece is at: http://moneyfeatures.blogs.money.cnn.com/2009/07/20/the-commercial-real-estate-time-bomb/

[MadMaddie]

1. It's happening where I live

60% of all of the business buildings in the business park next to where I live are empty. More become empty every day...

[abbeyco]

2. It's happening all over

If the banks aren't lending and doing the stimulus thing for individual homeowners now, I don't know what is going to happen with the CRE folks, especially when some of their tenants have gone under.

The next big mess...

[Jazzgirl]

3. We can't figure out why they keep building this

commercial property here in North Texas. For example, about a mile from my house is a new strip shopping center that has been there for a little over a year. It has one (one) business in it, a restaurant. The rest of the building has never been occupied by anybody else. On the west side of the highway overpass (this center is on the east) a brand new strip mall is being built. Nobody knows what's supposed to go in there and the Albertson's that it's being built next to doesn't have any idea who is building it. I see the same thing by where I work. All these strip malls that are half or better than half empty. What is the deal?