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According to an article in the Dallas Morning News, Dallas-Fort Worth’s commercial real estate industry may face another year of foreclosures as more properties lose value and financing.
The article said:
“The vast majority of buildings bought after 2005 are absolutely not worth the debt,” said Paul Whitman, president of commercial real estate firm Jones Lang LaSalle’s Dallas office. “Don’t be shocked that there will be hundreds of millions of dollars in foreclosures in commercial real estate in 2010.”
Commercial real estate foreclosures have already made its impact on the economy with several developers and investors filing bankruptcy and many properties remaining empty even with their once sought after luxury amenities. The truth is that many commercial properties have been greatly impacted by declining values that fall well below the debt owed on the property. That phenomenon has created a level of commercial real estate foreclosures on the market which has become a bottleneck in the sales pipeline, so that even if a developer or investor wants to sell a property to avoid foreclosure, they can’t do so without offering a price well below the amount of their debt. We can expect to see more of that has the foreclosure crisis continues.
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October 7th, 2009 at 11:44 am
[...] Part of the problem with domestic real estate ETFs may be the starting point for their decline. A bubble had formed under the U.S. real estate market prior to the financial crisis, making the correction more prolonged and severe than the downturns seen around the world. Many investors looking to gain exposure to real estate have begun looking beyond their borders to global real estate ETFs. Although the U.S. REIT market has rallied recently (gaining more than 30% in the third quarter), significant uncertainties remain, particularly surrounding the fate of commercial real estate. [...]
October 17th, 2009 at 6:58 pm
There are good companies out there actually trying to help people. But unfortunately there are also bad ones that are trying to take advantage of the situations. I purchased 2 foreclosures and have been happy with my purchases.