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2008 Commercial Real Estate Trends For March
The increases being seen in the foreclosure rates on commercial properties are slight and have not brought a large number of significant defaults yet. The only investors that are likely to experience difficulties are those who purchased their properties when the market was at its peak and they used short term financing to manage the debt. It is felt that only if there is an extended slowdown in the economy will these investors have trouble. Currently, there has been no indication that there will be a mass wave of commercial foreclosures. A number of different dynamics are coming into play which can make a significant impact on investors. Obtaining credit is more difficult, the cost of credit has increased, and tighter restrictions by lenders are all changing the way investors have been able to operate. Now, with the current economic uncertainty it makes decision making more difficult for any investor. As sellers haven't been receiving the bids on their properties that they were hoping for, they have been pulling offerings from the market. Buyers find that they have to put in more equity as the debt costs are more expensive now which is causing them to ask for a reduction in the price of the properties that they are interested in. These disconnect between buyers and sellers haven't lessened yet and there haven't been any real discounts on properties to note. 2008 will undoubtedly bring some good deals though. And, some properties in the U.S. markets when compared to those overseas, have a favorable outlook globally. Of course the more major markets like Manhattan, San Francisco, or Washington D.C. are felt to be undersupplied with new construction unlike the overbuilding that took place in the residential sector. Different types of commercial properties are doing better than others. Apartments and multi-family properties have had a market correction in 2006 which brought them more in line already. In addition, their debt markets are still being supplied by Fannie Mae and Freddie Mac which makes getting funding much easier than other types of commercial properties. During these challenging times knowledge is always the key to success. Investors need to make sure to connect themselves with an experienced broker who will help them stay abreast of the current conditions. Knowing your own position in regards to your assets along with your actual position will play a large part in how to best deal with 2008. Focusing on your own portfolio and improving it will be the best plan. Some resources available to any investor are free research reports are available online as well as the expert assistance from knowledgeable brokers like those at SteelHead Capital. Article Directory: http://www.articledashboard.com Based on excerpts from the commercial real estate investment talk show Capital Synergies. Capital Synergies is sponsored this week by Steelhead Capital, your commercial loan advantage. This episode's contributing guest speaker was Mr. Dan Fasulo, Managing Director of research for Real Capital Analytics Direct. By Senior Staff Writer, William K. Matthews, Capital Synergies. |
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