Next big economic headache: Commercial real estate
Sep 9, 2009 at 12:00 AM
Kiplinger.com is reporting that the commercial property outlook in the Unite States is woeful. Vacancies are rising; rents, falling; and prices, dropping. Most buyers can’t agree with sellers on terms. The few who do often aren’t able to secure credit. And it’ll get worse before it gets better for developers, owners, builders, lenders and investors.The crux of the problem: an inability to refinance. An estimated $250 billion in loans will mature this year, with $300 billion more coming due in each of the next three years. With property values down 40% for some office buildings since the recession began, owners are in a bind. Worse, values are still eroding: By the end of 2010, they’re likely to lose an additional 10%.Read the full report at the Kiplinger.com web site.