Posted on 09/14/2009 1:20:40 PM PDT by Steelfish
New Meltdown Looms As Sacramento-Area Commercial Vacancy Rate Rises
Dale Kasler
Sep. 14, 2009
From an unfinished shopping mall in Elk Grove to the ghostly quiet office parks of South Placer, the slump that has overtaken commercial real estate could rival the meltdown in the housing market.
Across the Sacramento region, vacancy rates have soared while rents and property values have plummeted, leaving many landlords struggling to pay their mortgages. A few are in bankruptcy protection.
Sacramento's troubles are worse than most, according to national analysts, but the threat looms across the entire country. With the national economy seemingly poised for a recovery, some experts fear the recession could be prolonged if commercial loans go bust like residential mortgages.
(Excerpt) Read more at sacbee.com ...
Running out of people to tax to death?
“the slump that has overtaken commercial real estate could rival the meltdown in the housing market.”
It’s going to be bigger than the residential bust. Keep that in mind when you read about “green shoots” and the “new bull market”. Bull, indeed.
There is a strip mall in Elk Grove, CA that was completed 2-3 years ago and I have not seen one tenant move into it. There is a mall that was being built too that is perhaps 25% completed when the developer stopped construction two years ago and the same developer went into bankruptcy. It is going to take a decade to elminate this glut.
How’s that Hopey-Changey thing working out for you libs in CA?
There are a lot of early investors out there who made legitimate investments and had big equity. That is now gone and to make matters worse tenants have developed very bad habits and know that they can not pay for months and then just move to another house.
Those investors are now starting to bail out..mail the bank the keys. Upside down and negative cash flow. We know people in exactly this circumstance. There 6 investment houses will go in the next few weeks.
They should raise taxes (again), legalize pot and gay marriage.
That’ll help the economy. :)
BOHICA
Maybe they can give the govt union workers more raises and benefits plus give illegal aliens even more ENDLESS benefits.
I think the system around the country is starting to crumble. Too many union workers doing nothing, too much corruption, too many lies. When something is totally corrupt it fails.
Locally on the radio on Sat there are slimy lawyers talking about greedy banks. The attorneys try to get your mortgage cancelled because a minor glitch in your paperwork.
Yes, and most of the commercial real estate loans in the last ten to fifteen years have been made on a non-recourse basis, meaning that the borrower just turns the keys over to the lender when the loan defaults.
Many of these loans have fairly short maturity periods, say ten years, and longer amortization periods, say twenty years. With the loss of tenants and existing tenants renegotiating to lower rent in order to prevent going bust, the equity will not be there for many borrowers when the loans mature. That means the borrowers will have to come up with a bunch of cash at maturity to cover the equity deficiency - which is going to be hard for many borrowers - or the lenders will have to extend or foreclose. I expect those with cash will be able to pick up some really good commercial real estate deals in the next couple of years.
libs doing great, they don’t work.
the rest of us, well we could use a few less libs ( any means necessary).
Its not just Sacramento.....
In Orlando area....same thing is happening. Many stores have closed, and malls and strip malls look empty. Its getting ugly everywhere
The only thing helping this economy is getting rid of the dems in sacramento and washington. ( all of them- the last good democrat was grover cleveland.)
Please tell me what business, other than dope-dealing, contracted drive-by shootings, arson-for-hire, and pimpin’ out your ‘victim’ status, would an upstanding business, businessperson, entrepreneur or capitalist ever want to establish ANYTHING in California?
The Coming Consequences of Banking Fraud
by: J. S. Kim September 09, 2009
The Double Dip Recession, or the “W” shaped recovery that a minority of economists, such as Joseph Stiglitz, is now stating as a strong possible outcome of this current rally, should not be discussed in the realm of economics but rather in the more apropos realm of financial fraud.
The fact that the upleg of the “W” shaped recovery that is occurring now will inevitably crumble in spectacular fashion will not be a result of any free market principle, but rather the direct consequence of a fraudulent scheme executed by an elite global financial oligarchy, otherwise known as Central Banks.
If the mission of this current manufactured leg-up in Western stock markets was to fool the world into believing that global economies are recovering, then clearly, up until this point, the mission has been a resounding success.
For those unfamiliar with the term “blowback”, it's a CIA term that was first used in March 1954 to describe the unintended consequences of US government international activities kept secret from the American people.
[snip]
New Meltdown Looms As Sacramento-Area Commercial Vacancy Rate Rises
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