Posted on 06/17/2009 9:38:42 PM PDT by FromLori
Mall data is UGLY!
Last week we pointed you to some analysis done by David Bodamer at Retail Traffic Magazine, which showed that a recent mall transaction valued the property as low as 50% below its 2007 peak. The Buffalo mall sale is just a single datapoint, but it gives a clue as to how bad the market is for commercial/retail property.
Well, Bodamer's got more data on the Buffalo market, and it turns out his initial analysis may have been optimistic. That worst-case 50% decline may actually be more like 60%
Ive gotten Real Capital Analytics data on Buffalo, which includes estimates on five of the properties that changed hands in 2004 and in 2009. RCAs data puts the price paid in April 2004 at $96 per square foot per asset and puts the price on the current deal at $53 per square foot per asset. (One asset, however, shows up in RCAs data in 2004 at $12 per square foot.) Moreover, one of properties in the Buffalo market that was originally part of the 2004 DDR deal traded in January 2007 at $131 per square foot. In June 2007, another property from the 2004 deal traded at $138 per square foot, according to RCAs data. That was right during the stretch when the market peaked. However, two other properties from the 2004 portfolio also traded in June 2007, but only at $102 per square foot.
Put that all together and what do you get? The pricing drop from $96 per square foot to $53 per square foot represents a 45 percent discount to the 2004 price. The discount to 2007 is somewhere between 45 percent and 60 percent, based on the 2007 prices.
Read the whole thing, which a full rundown of the data. It's ugly >
http://blog.retailtrafficmag.com/retail_traffic_court/2009/06/16/more-on-valuations-in-buffalo/
(Excerpt) Read more at businessinsider.com ...
My husband reports office space for lease in Albany, OR at 99 cents a foot....not sure if that is only for a year, or what....but, it’s REALLY bad...
Time to go shopping, sales must be great!
Whoops! My mall management stocks are down.
Never mind.
JJ61
Its scary “Brother can you spare a dime”
All is well! The recovery starts on Oct. 1st 2009. The economists said so.
OBAMA
The Change Weve Been Waiting For
Many Commercial loans will come due in the next few years.
With revenue and cash flow crashing...
What could go wrong ?
Prices going down 60% is an economic effect known as: DEflation.
That’s the opposite of INflation.
Deflation. It’s a word mostly unknown to many who cry about the current economy.
time to buy.
I know developers who cannot get permanent financing on their construction loans, and these are with (historically) good tenants.
Once the construction is done and the place is up and running, if you can’t close the permanent loan or get permanent funding, you’re in big trouble.
If we get Jimmah’ inflation or worse, the rates may top 20 percent .
Depression in the 30’s was a deflationary period. Hope hope hope.
This country needs to cut back on its spending, and start saving.
The real estate bubble further inflated prices in some states (e.g. California) to insane levels. I will not cite examples here even though I could easily do so. It would be a breach of ethics for me to tell what I know.
When every commercial real estate owner was looking to pyramid holdings based on hyper-inflated values: Wall Street was actively engaged in massive fraud. Bankers and commercial mortgage brokers and hedge fund managers and investment brokers ought to be lined up and shot in my opinion. They will reap the whirlwind. Biblical payback is coming sooner, rather than later.
Just my personal opinion. Obama really wants riots in the streets. He really wants to declare martial law. The prison camps have been built. The boxcars are ready and waiting.
Check my freeper page for updates.
I Forgot how to do that check the freeper page???
Thank you I’ll catch on eventually
Click Japan Here . . .
This graph pretty much parallels Japanese and U.S. real estate values. Thanks to our corrupt American political parties everything is intrinsically interconnected today.
The Federal Reserve will and has for almost a hundred years decided when and where you should save. Go against them and be crushed.
You could buy things, but the market is and has been so distorted, stimulated, manipulated, planned that no one knows what the true value of a thing is.
At any moment the government could say support wind power, or coal, or neither, or some, or part. It could support people living in Detroit, Toledo, or Gary, or bulldoze them.
It could bail out company A., but not B. Bail out student loans, but not commercial loans.
You tell me where to put a multi year investment?
So the only sure way, is to buy you some politicians. It’s worked for the Unions, the Banks.
If you are not or have not bought you quiet a bit of politicians, then guess who is the sheep to be sheared to dress other in fine wool is? You.
That’s the ‘political economy’ we live in now. Every man for himself and run your racket through Washington.
I said, before I read your link...."You tell me where to put a multi year investment?"
It's 1929 Bush was Hoover, and Obama is now FDR. Only, Hoover and FDR were way, way more better, accomplished, educated men. And, America then had a way way more productive society and less competition and less debts.
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