According to an article in the Dallas Morning News, commercial real estate values are continuing their downward spiral dropping 8.6 percent in April, which is the largest one month decline ever recorded. And states like Texas have experienced the worst commercial real estate declines with some property values falling off by more than 20 percent.

The article said:

“Another recent commercial property report predicts that the Dallas area will have the largest decline in office prices in the country during the coming year. That forecast last week by PricewaterhouseCoopers predicts that the commercial real estate market won’t begin to recover until 2011.”

We may be heading for a commercial real estate foreclosure crisis as predicted by Billionaire George Soros back in April (see: http://www.allmandandlee.com/bankruptcy_blog/economy/billionaire-predicts-that-commercial-real-estate-will-plunge/ ). Already, we’ve seen several big name commercial real estate foreclosures such as the Richardson Heights Shopping Center which had been in business for over 50 years (see: http://www.allmandandlee.com/bankruptcy_blog/economy/after-a-half-century-shopping-center-faces-foreclosure/ ) and 658 commercial property foreclosures that have been posted in the Dallas-Fort Worth area since the beginning of 2009.

The rapid decline of commercial real estate values coupled with foreclosures are conspiring to make many commercial real estate companies vulnerable to bankruptcy and the need to implement job losses to bring down costs. Massive ob losses in this industry would be another unwanted shock to the economy, increasing unemployment and prolonging the already protracted crisis.

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