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Mall Real Estate Down 60% From Its Peak?
The Business Insider ^ | 6/17/09

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%

I’ve gotten Real Capital Analytic’s data on Buffalo, which includes estimates on five of the properties that changed hands in 2004 and in 2009. RCA’s 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 RCA’s 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 RCA’s 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 ...


TOPICS: Business/Economy; Government
KEYWORDS: bhoeconomy; economy; realestate; retail; thecomingdepression
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1 posted on 06/17/2009 9:38:42 PM PDT by FromLori
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To: FromLori

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...


2 posted on 06/17/2009 9:42:16 PM PDT by goodnesswins (For lease)
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To: FromLori

Time to go shopping, sales must be great!

Whoops! My mall management stocks are down.
Never mind.

JJ61


3 posted on 06/17/2009 9:43:20 PM PDT by JerseyJohn61 (Better Late Than Never.......sometimes over lapping is worth the effort....)
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To: goodnesswins

Its scary “Brother can you spare a dime”


4 posted on 06/17/2009 9:48:47 PM PDT by FromLori (FromLori)
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To: FromLori

All is well! The recovery starts on Oct. 1st 2009. The economists said so.


5 posted on 06/17/2009 9:49:33 PM PDT by headstamp 2 (Spay or Neuter your liberal today!)
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To: FromLori
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.

OBAMA

The Change We’ve Been Waiting For

6 posted on 06/17/2009 9:54:54 PM PDT by Pontiac (Your message here.)
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To: FromLori

Many Commercial loans will come due in the next few years.

With revenue and cash flow crashing...

What could go wrong ?


7 posted on 06/17/2009 9:56:21 PM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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To: FromLori

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.


8 posted on 06/17/2009 9:59:24 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: FromLori

time to buy.


9 posted on 06/17/2009 10:00:37 PM PDT by Drango (A liberal's compassion is limited only by the size of someone else's wallet.)
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To: george76

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.


10 posted on 06/17/2009 10:02:45 PM PDT by Boiling Pots (B. Hussein Obama: The final turd George W. Bush laid on America)
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To: Boiling Pots

If we get Jimmah’ inflation or worse, the rates may top 20 percent .


11 posted on 06/17/2009 10:06:19 PM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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To: george76

Depression in the 30’s was a deflationary period. Hope hope hope.

This country needs to cut back on its spending, and start saving.


12 posted on 06/17/2009 10:16:28 PM PDT by Boiling Pots (B. Hussein Obama: The final turd George W. Bush laid on America)
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To: FromLori; M. Espinola; TigerLikesRooster; Travis McGee; All
Commercial real estate will fall even more. It was already fantastically overvalued back in 1999. Back when my experts were actively cashing out and selling over $ 100 million in holdings.

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.

13 posted on 06/17/2009 10:19:57 PM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
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To: ex-Texan

I Forgot how to do that check the freeper page???


14 posted on 06/17/2009 10:35:11 PM PDT by FromLori (FromLori)
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To: FromLori
To check any poster's freeper page -- just click on their screen name.

Easy Hot Link to Mine is Here !

15 posted on 06/17/2009 10:40:24 PM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
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To: ex-Texan

Thank you I’ll catch on eventually


16 posted on 06/17/2009 10:44:30 PM PDT by FromLori (FromLori)
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To: FromLori
To get a glimpse of what is going on in Asia with the stock markets --

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.

17 posted on 06/17/2009 10:56:54 PM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
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To: ex-Texan

http://www.bloomberg.com/apps/news?pid=20601087&sid=az2uhkFb4eYk

We are so in for it.


18 posted on 06/17/2009 11:01:31 PM PDT by FromLori (FromLori)
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To: Boiling Pots

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.


19 posted on 06/18/2009 3:01:58 AM PDT by Leisler ("It is terrible to contemplate how few politicians are hanged."~G.K. Chesterton)
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To: FromLori
“Any correction will be short-lived as long-term fund managers are still sitting on the sidelines with their cash.”

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.

20 posted on 06/18/2009 3:08:09 AM PDT by Leisler ("It is terrible to contemplate how few politicians are hanged."~G.K. Chesterton)
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