The idea that commercial real estate might be the next big thing to implode--which is all too familiar within the commercial real estate industry--is finally getting some mainstream attention. On Saturday, speaking at a conference at Vanderbilt University, Atlanta Federal Reserve Bank president Dennis Lockhart said that "on our watch list this year, as a risk to the (U.S. economic) outlook, is continuing worsening in the commercial real estate sector."
Earlier last week, Lockhart waxed a bit more optimistic by asserting that the economy might experience "slow and tentative growth" as early as the third quarter of this year. On the other hand, Lockhart's colleague as a regional bank president, San Francisco Fed president Janet Yellen, said last week that "it's still impossible to know how deep the contraction will ultimately be." Take your pick.
Whatever else commercial real estate will be in the near- to medium term, it certainly won't see the investment volume of recent years, not only in the United States but almost everywhere in the world. According to Real Capital Analytics, about 1,000 buildings valued at $47 billion traded hands worldwide in the first quarter of 2009, a small fraction--about 16 percent--of the volume during the same period in 2007.
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Jenny
Earlier last week, Lockhart waxed a bit more optimistic by asserting that the economy might experience "slow and tentative growth" as early as the third quarter of this year. On the other hand, Lockhart's colleague as a regional bank president, San Francisco Fed president Janet Yellen, said last week that "it's still impossible to know how deep the contraction will ultimately be." Take your pick.
Whatever else commercial real estate will be in the near- to medium term, it certainly won't see the investment volume of recent years, not only in the United States but almost everywhere in the world. According to Real Capital Analytics, about 1,000 buildings valued at $47 billion traded hands worldwide in the first quarter of 2009, a small fraction--about 16 percent--of the volume during the same period in 2007.
Read more...
Jenny
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