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Old 04-16-2009, 10:48 PM
 
Location: Iowa, Heartland of Murica
3,433 posts, read 5,795,506 times
Reputation: 3419

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For those of you who are "optimistic" about the economy, this should be a good wake up call. Enjoy!



NEW YORK (Reuters) - General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on Thursday in the biggest real estate failure in U.S. history. Ending months of speculation, General Growth, along with 158 of its 200-plus U.S. malls, filed Chapter 11 while it tries to refinance its debts...

General Growth files historic real estate bankruptcy | U.S. | Reuters
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Old 04-16-2009, 10:51 PM
 
Location: San Diego, CA
4,883 posts, read 7,660,301 times
Reputation: 1905
Commercial real-estate prices always trail residential. What's more is that even more teaser rate ARMs are resetting in the next couple months then did in 2008 so expect to see an even larger second wave of defaults mainly because deregulation allowed such things to happen to begin with. That's why so many subprime loans have their payments go up even as the prime interest rate goes down something that was illegal in the 1990's. Seriously, many of these balloon payment loans double or even triple and it is doubtful anyone can keep up with them. All of these people no doubt figured they'd just refinance to get out of the balloon payments but that's not possible now though not for anyone who doesn't have triple A credit. I feel bad for them.
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Old 04-16-2009, 11:02 PM
 
Location: Iowa, Heartland of Murica
3,433 posts, read 5,795,506 times
Reputation: 3419
The consequences of the collapse of the commercial real estate market will be disastrous. Most "common folk" do not even understand what is coming in the next year or two. It is very depressing
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Old 04-16-2009, 11:22 PM
 
Location: toronto, Canada
772 posts, read 1,134,417 times
Reputation: 283
Gerald Celente shares his view on the forthcoming commercial real estate collapse of 2009.
The Collapse of ‘09 by Gerald Celente

This will be a shock to many who don't understand how large a figure retirement income funds are tied into commercial real estate.
There's still no guarantee that REITs have hit bottom... If investors expect that REIT-owned properties will lose value, they won't be in a hurry to buy a depreciating investment. For average investors saving for long-term goals like retirement, however, holding a small fraction of your assets in REITs... adds diversification to the income-producing side of your portfolio, while including the potential for long-term price appreciation that real estate offers. Unless you think the U.S. real estate market is in for a long-term decline.

"The industry faces refinancing risks, falling rents and continued dividend cuts on top of high leverage," said Rob Ivanoff, an analyst with fund industry tracker Financial Research Corp. in Boston. "Any investor looking to get into REITs now should also be aware that the currently attractive yields are something of an illusion. Both components that go into the yield equation appear certain to shift in ways that will bring yields back down".


After this seasons dead cat bounce, this is when the 'great teen depression' starts.
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Old 06-08-2010, 07:58 PM
 
9 posts, read 17,525 times
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I've been hearing this for two years. It is now nearing the end of the 2nd quarter of 2010. Has it tanked yet?
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Old 06-08-2010, 09:00 PM
 
4,724 posts, read 3,788,665 times
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I just noticed in my local paper today that a large amount of commercial real estate is up for sale in my town, these are occupied buildings with some good going businesses, I've also heard about the coming crash of comm. real estate but this is the first time I've really seen anything that might give the stories some validity. The ton of strip malls in the surrounding cities are sure showing signs of failure, the vacancies are staggering, whole blocks closed up, some for two years now.
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Old 06-08-2010, 09:05 PM
 
2,851 posts, read 3,160,045 times
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Real estate is still dropping. We still haven't had the feds adjust the rates or the shadow inventory from foreclosure come into play.
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Old 06-08-2010, 09:41 PM
 
Location: Orlando
8,253 posts, read 11,843,777 times
Reputation: 4115
This isn't unexpected news. I was commenting the other day I expected more Bk's by now in commercial RE. As many of the loans given balloon and their vacancies increase the values will plumet and place these borrowers in a situation similar to where people were with residential, where they were expecting to get permanent financing but the values fell where they couldn't refi.. with th e staggering vacancies the values will implode. The next 3 years are going to be really ugly in commercial which can't help residential.

While I have seen some improvements in residential I suspect it will experience a large bump in the road... Not good! But for those high end investors it will mean some great deals to be had and millions will be made.
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Old 06-08-2010, 09:43 PM
 
Location: 3rd rock from the sun
3,858 posts, read 6,413,102 times
Reputation: 1814
This thread is over a year old. The commercial real estate collapse didn't happen.
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Old 06-08-2010, 09:55 PM
 
Location: Winter doorway to Texas weather
13,698 posts, read 18,215,622 times
Reputation: 26031
Maybe it's a slow motion collapse? I've had a commercial property in Texas for sale for less than its appraisal value now for five years.
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