Commercial Real Estate Market May Not Turn Around Until 2009
SOURCE: Forbes
The first half of 2008 may see real estate investors hoard their cash and wait for the moment to strike when values achieve something like a bottom. That moment will likely not come until at least the first quarter of 2009. It is unlikely that the early 2007 levels will return anytime soon.
Some commercial property owners have been banking on the typical strong fundamentals in rent and occupancy. The only difficulty with this is that some of these buildings were bought using high rent projections along with steep debt. As rent growth and occupancy slow, the potential for difficulty rises. But, some industrial properties that are less leveraged and have long leases should be able to handle the slowdown.
It is felt that the rental housing market will not be hit too severely as homeowners who have been foreclosed on will be pushed into the rental market. The multi-family owners should be able to fill their units with these renters.
One bold prediction to note is that by the time the bottom is hit in the real estate market, there will be a large amount of capital waiting to be invested. It is felt that any bargains that come along will be quickly snapped up.
Read full report »
The first half of 2008 may see real estate investors hoard their cash and wait for the moment to strike when values achieve something like a bottom. That moment will likely not come until at least the first quarter of 2009. It is unlikely that the early 2007 levels will return anytime soon.
Some commercial property owners have been banking on the typical strong fundamentals in rent and occupancy. The only difficulty with this is that some of these buildings were bought using high rent projections along with steep debt. As rent growth and occupancy slow, the potential for difficulty rises. But, some industrial properties that are less leveraged and have long leases should be able to handle the slowdown.
It is felt that the rental housing market will not be hit too severely as homeowners who have been foreclosed on will be pushed into the rental market. The multi-family owners should be able to fill their units with these renters.
One bold prediction to note is that by the time the bottom is hit in the real estate market, there will be a large amount of capital waiting to be invested. It is felt that any bargains that come along will be quickly snapped up.
Read full report »
