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Commercial Real Estate Forecast: 2010 Stable - Bargain Hunters poised to take Advantage
| Guest post by: Scott Meyers |
Article Overview: The commercial real estate industry faces a dismal forecast for the next 5 years. Nationally, 2010 looks like an unavoidable tsunami of foreclosures and short sales for a multitude of borrowers, investors, and lenders – are the reports from the mainstream media. These less than positive predictions and negative economic conditions could create the opportunity of a lifetime for investors this year and next. The values of commercial real estate are at all-time cyclical lows, presenting one of the best acquisition environments this country has ever seen.
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Commercial Real Estate Forecast: 2010 Stable - Bargain Hunters poised to take Advantage
The
commercial real estate industry faces a dismal forecast for the next
5 years. Nationally, 2010 looks like an unavoidable tsunami of
foreclosures and short sales for a multitude of borrowers, investors,
and lenders – are the reports from the mainstream media.
Each
year through 2015, there will be $250 billion to $300 billion in
loans that will come due on office buildings, malls, shopping
centers, Multi-family apartment buildings, manufacturing facilities,
warehouses, Self Storage and other commercial properties, according
to PriceWaterhouseCoopers, a New York-based professional services
company.
Scarce capital, high vacancies, declining rents
and sluggish job growth will continue to place stress on the
commercial sector all across the country. Although there will be
spurts of positive activity, it may take until 2012 for a sustainable
recovery to take hold in this country.
However, with
adversity, comes opportunity. These less than positive predictions
and negative economic conditions could create the opportunity of a
lifetime for investors this year and next. The values of commercial
real estate are at all-time cyclical lows, presenting one of the best
acquisition environments this country has ever seen.
Not
to get over excited - as not all notes coming due will default - some
investors will be successful in refinancing. Others will find buyers
and avoid default, and still others will work with lenders on short
sales. And certainly, there will be investors who will buy
foreclosed and bank-owned properties that lenders put back on the
market at bargain prices.
PriceWaterhouseCoopers also
projects commercial property foreclosures to accelerate across the
nation. To build up their loss reserves, financial institutions
delayed “dropping the hammer” on distressed borrowers. Now, due
to government bailouts, they are ready to take action.
Due
to higher vacancies and falling rents, the nation’s commercial
property values are starting to reflect deteriorating financial
performance in some areas of the country. Problems with maturing
debt, specifically again, the inability to secure financing, will
cause a surge in defaults by some investors.
As a
result, loan defaults will continue and in some cases increase at a
dizzying pace this year. We can also expect the number of bank-owned
and short sale opportunities to be abundant throughout the next 2
years. Although this is an unfortunate situation for the distressed
owners who are being forced to dispose of these properties, or have
lost them in a short sale or foreclosure, it will bring a tidal wave
of opportunities for investors who will play a major role in this
correction.
These Well-financed and well funded investors
are going to be snapping up these bargain-priced, bank-owned, and
commercial short sale opportunities. The way we see it, property
prices will likely continue to decline through 2010 even as sales of
buildings increase. This is in large part due to the # of distressed
properties being sold at depressed values, and the new and more
conservative commercial underwriting guidelinesthat lenders are
now using to value these commercial assets.
The
Good news is that this may be the best time since the Great
Depression for the savvy commercial investor to take advantage of the
current conditions. And we all know, more millionaires were made
during the Great Depression than any other time in our nation’s
history, and they did this with commercial Real Estate! And as
Commercial Real Estate investors focusing on the Self Storage Sector,
this is music to our ears!
The
road to recovery begins now! Are you ready to take advantage?
Commercial real estate lenders optimistic in 2010
Real Estate Commercial Loans?
Banks Continue To Hold Back on Lending
Looming Commercial Real Estate Crisis offers Huge Opportunities in Self Storage.
Commercial Properties Being Written Down by 50%
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About the Author: Scott Meyers RSS for Scott's articles - Visit Scott's website Click here to visit Scott's website   Buying an existing selfstorage facility The Future of Self Storage The Self Storage Investors Dilemma TO BUY OR TO BUILD Self Storage Second Class Investment Not Anymore Myths and Investment Opportunities in Self Storage |
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