Commercial Real Estate

Commercial Real Estate ‘Crisis’ Looming for U.S. By David Wilson Nov. 11 (Bloomberg) -- “A crisis of unprecedented proportions is approaching” in the U.S. commercial real-estate market, according to Randall Zisler, chief executive officer of Zisler Capital Partners LLC. The CHART OF THE DAY displays quarterly returns on commercial property -- apartment buildings, hotels, industrial sites, offices and stores -- as compiled by the National Council of Real Estate Investment Fiduciaries. Returns were negative for the past five quarters, the longest streak since 1992. Property prices have fallen by 30 percent to 50 percent from their peaks, Zisler estimated yesterday in a report. The plunge has wiped out the equity in most real-estate deals that relied on debt financing since 2005, he wrote. Zisler, whose firm focuses on real-estate investment, estimated that building owners will default on $500 billion to $750 billion of mortgage debt. This equals as much as 54 percent of the $1.4 trillion in loans that will come due in four years, by his count. “Much of the debt is likely worth about 50 percent of par, or less,” the report said. Many banks will end up insolvent as they reduce the value of their holdings, he wrote, adding that regional and community lenders are especially vulnerable. California, in particular, is experiencing a downward spiral in commercial property as prices decline and a growing number of tenants default, Zisler wrote. His analysis was included in Controller John Chiang’s monthly review of the state’s finances. (To save a copy of the chart, click here.) To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

Which is one other reason the DOW will go to 14000+. As Bond defaults in sower Real Estate deals it will cause credit default swaps to trigger, which will increase the coffers of Citi, Morgan Stanley, Goldman and JPM. This in turn will force the players to move rates down as the depression deepens, which combined with more governement/fed moves to buy addtional impaired assets from the banks to shield them from the losses will enable these morons above Citi, goldman et al to borrow even more funds at near zero interest rates which combined with their coffers now full of credit default swaps bounty will enable them to buy stock at will in their dark pools with ther high frequency trading. They will do that between themselves selling ******** over and over to each other in a ZERO sum game while increasing prices on the DOW to record levels and then that will generate a gap beween the DOW and all the other indices which will tell the masses that there is a wide divergence beween everything else and the DOW as everything else will appear , (wil be actually) very cheap. And then that will trigger the mother of all melt ups in all the other indices which will further increase the dow to record levels. As 401K's swell, people will start buying houses again and will increase the demand for houses and then the construction industry will boom as more houses are built which will then start generating jobs across the industry which will further start bulging profits of all corporations and then the SPX, DOW and other indices woll start anticipating this and will start rising again so that by the time 2011 starts the DOW mght be hitting 20000 with GOLD at 20000 also and a coffee will cost $50. ..... Then GOLD bugs will takeover Goldman Suchs and will run the world government.....You get the gist of it.... GS.

just like anything else..if it costs too much the buyer will not buy...ur example of coffee at 50...no way! who is gonna buy it? not even the starsucks crowd can afford that...as with all consumer products if price too high it will go out of business...maybe we shud hope that walmart opens some coffee spots in their stores:)

golden sacks getting ready to upgrade reit sector

just like anything else..if it costs too much the buyer will not buy...ur example of coffee at 50...no way! who is gonna buy it? not even the starsucks crowd can afford that...as with all consumer products if price too high it will go out of business...maybe we shud hope that walmart opens some coffee spots in their stores:)

I won't drink a walmart coffee... maybe it's fifty percent diluted. Who knows what they added.