Commercial property market to hit bottom in 2010, report says

Los Angeles Times ^ | 11/5/2009 | Roger Vincent

[SeekAndFind]

Owners of properties such as office buildings, warehouses and malls will suffer a surge of painful defaults, write-downs as the market finally faces up to the reality of its diminished conditions.

fter spending more than a year in suspended animation, the commercial real estate industry is expected to hit bottom in 2010 with a wrenching thud.

Owners of business properties such as office buildings, warehouses and malls will suffer a surge of painful defaults, write-downs and workouts with their lenders as the market finally faces up to the reality of its diminished conditions, according to a report set for release today.

The long-awaited blood bath, however, will benefit investors who are able to swoop in to take advantage of record bargains.

Unlike the formerly overheated housing market, which is in the process of being purged through foreclosures and sellers' growing willingness to lower their asking prices, the business of buying and selling commercial real estate has been stuck in neutral since the recession kicked in.

So far, potential sellers have been loath to lower their prices, and banks have been unwilling or unable to lend money for purchases. Even financially strapped owners who are unable to keep up their mortgage payments haven't had to let go because their lenders don't want to take back distressed properties in a down economy.

Banks instead have often been willing to renegotiate loan terms, a practice drolly referred to as "extend and pretend," as both lenders and debtors hoped the market would turn around.

The era of wishful thinking is about to end, according to industry professionals who participated in a study by consulting firm PriceWaterhouseCoopers and the Urban Land Institute, a real estate industry trade group and think tank.

[not2worry]

HAHAHAHAHAHA-———This is a crisis that is being covered up from Coast to Coast.

It will be one of the BIGGEST Bailouts ever!

I believe O knows this and is probably not only chain-smoking but considering harder stuff to calm his nerves.

[Zeddicus]

ROFL! You gotta be kidding me!? “Hit BOTTOM in 2010”?

What a joke. 2010 is going to be just the BEGINNING of this next crash.

[Hans]

Old fashioned fogies, who would fool with commercial property, go to work for Goldman Sachs, that's where the honest money is.
Forget punitive property taxes, you just wake each morning, give your better half a great kiss on her Federal lips, then to the Goldman water cooler for 'bonus time' gossip. All on the up and up this sort of thing. As the vast private sector is drained of value, the true free market guys, still wiping sand out of their eyes, wait for their next Federally guaranteed, insider doped deal, "move on people, nothing to see here".

[RocketMan1]

I’ve been saying this for over a year now to everyone, anytime someone says “the economy is recovering.” In 2010, the next, MUCH larger wave of ARM’s and CDS’s become due. This will include commercial real estate. Anyone who believes “we are in recovery” .. even these Wall Street/CNBC types .. are either deluded, or they are fools!

Things would be bad enough WITHOUT THE “STIMULUS,” but with government deficits having moved from Billions to TRillions under ZER0 and Piglosi, be prepared for thingsto get worse. MUCH worse!

We are seeing nothing more than a suckers rally right now. As long as this idiot President and Piglosi are in office, things will NOT get better. They will get much, much worse!