Commercial Real Estate Imploding

[Joanne98]

There has been lots of news about commercial real estate in the past week. None of it is any good. Let's take a look.

U.S. mall vacancy rates rise as economy slides


The vacancy rate at U.S. strip malls rose to the highest level since 1996 in the first quarter of 2008, while that for big malls reached levels unseen since 2002, research firm Reis said on Friday. The amount of space occupied by retailers fell for the first time since Reis began tracking the sector in 1980.

"Retailers are grappling with the implications of the housing and job market downturns for consumer activity, with the result that retail sector fundamentals -- occupancy and rent levels -- are being strained by anemic demand for space," Reis chief economist Sam Chandan said in statement.

Strip mall vacancies rose 0.2 percentage points from the preceding quarter to 7.7 percent. By the end of the year, the rate likely will reach or surpass 8 percent, Reis said. The vacancy rate for big regional malls was the highest since the fourth quarter of 2002, the report said.

Subprime Losses Concentrated At Large Banks, CRE At Smaller Banks
http://globaleconomicanalysis.blogspot.com/2008/04/commercial-real-estate-imploding.html

[flashl]

1. K&R

[soothsayer]

2. Turn 'em into apartments. everyone's going to need to rent now.

[jaksavage]

3. I can hardly wait

To subdivide some 10,000 sq ft mansions into work class housing projects.
It is my newest business concept.

[On the Road]

4. It Was Done During the Depression

with a lot of huge townhouses in cities. I know someone who bought an absolutely enormous rowhouse in a horrible section of north Baltimore several years ago. It had been split up into eight sizeable apartments, some with chandeliers and fireplaces. Took a lot of work, but the street is genrtifying and it was a great move.

What you're suggesting is really not a bad thing to consider these days. The buy to buy is when everyone is panicking. In fact, you might not even need to do any construction -- just get five roommates to cover the mortgage until prices go up again. And despite a few headaches, you'll have a nice place to live.

[Uben]

5. I've had offers.............

.....from many firms all over the U.S. to buy my apt complex in Dallas (158 units). The prices here are so much lower than most cities in the U.S., that they see it as a real bargain. I'm not really in the market to sell (what would I do with the money), so I'll wait around till the offers get obscene. I'm already retired and live comfortably off the income they generate.