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Commercial Real Estate Time Bomb



April 21, 2009 – Comments (2)

I would have to say Mish has been right on target with his posts, stating what's to come with great foresight.  He has a post on commerical real estate that is simply saying what's to come in this area and what's been over looked.

In the last couple blogs I linked to a post on profits being down 85% and there is no question this commerical real estate problem is going to squeeze margins all over the place so those company earnings are not going to be able to recover any time soon.  Not all companies are commerical real estate, but what's not recoverable in the near future?  Finanicals, housing, commerical real estate...  What's going to pick up the "slack"?  (There's a heck of a lot of "slack" out there... )

I don't mind repeating when I held the top fool position my message was about commerical real estate.  I think the markets have yet to truly evaluate the problem and price itself accordingly.


2 Comments – Post Your Own

#1) On April 21, 2009 at 9:36 PM, foolsMeThrice (99.59) wrote:

Agreed, the markets are full of Bull Street right now.  I don't see this recovering in 2009 at all.  It just another rift.  Lets hope AIG is on the other side of all of wall street's bets.  It is the conduit of fed printing and money laundering.

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#2) On April 22, 2009 at 12:56 AM, awallejr (52.59) wrote:

Thing with commercial real estate is that it is a lagging indicator.  You will start to see acceleration in vacancy rates as unemployment continues to grow.  But since they say unemployment lags, expect commercial RE to lag after the lagging unemployment. The market just has to figure out who the sustainable new tenants will be, and I submit medical offices will lead.  I am liking MPW (bought some at 3.5)

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