According to the Fed, the commercial real estate (CRE) market size is $6.5 trillion, versus the residential market size at about $10 trillion. Although the size of the CRE market is smaller than the residential market in property value, this does not lessen the impact on our economy as the market becomes flooded with empty CRE space that cannot be sold. Take a look around your local community, and see all the lease signs up for businesses that could not make it through this depression.
The CRE impact from Wall Street to Main Street. Morgan & Stanley lost $1.2 billion. Regions Financial lost $912 million. There are many more losses, too many to mention but none larger than these. Take a look at the financial stocks, and see how many financial institutions blame their losses on the collapsing CRE market.
CRE property values are down by almost 50% since the 2007 peak. Too much supply and not enough demand. Good news is that we are bound to hit a bottom in the CRE market soon!
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Agree, the worst is yet to come. Everywhere I turn, I am seeing a lot of commecial properties available. I am guessing by this Christmas, things will not look pretty!
ReplyDeleteGee Kay