This has been mentioned on my blog for the last two years and now it looks like the dominoes are really starting to fall in commercial real estate. I am predicting the crash of 2010-2012 will wipe out 25-40% of all small to large sized US businesses and thus devastating the commercial sector.
The trickle down affect from lost jobs, more residential and commercial foreclosures will put the final nail in the Main Street Great Depression coffin. It is going to be bigger than anyone can ever fathom and the economic destruction will bankrupt many cities across the nation.
Billionaire investor George Soros said the global economic recovery is “liable to run out of steam” and a “double dip” may follow in 2010 or 2011. He spoke in Budapest today, in a lecture organized by the Central European University. Investor Wilbur L. Ross Jr. told Bloomberg Radio the U.S. is in the beginning of a “huge crash in commercial real estate.”
‘Wrong Direction’
“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”
Read more from Bloomberg
