The next shoe? If and when something is going to drop, you should know about it, beforehand, so that you can be proactive and strategic in your investment and management positions.

After years of plunging residential property valuations, commercial real estate (CRE) is now heading into the danger zone as  –office vacancies rise, stores close and hotel bookings fall.

All of this negative news could mean yet another body blow to already struggling financial institutions. According to Alan Todd, head of research on commercial-mortgage-backed bonds at J.P. Morgan Securities, he projects the following:

• Commercial-property losses of as much as $250 billion over the next 10 years; 
• Such a loss is in the order of about 7% of the $3.4 trillion outstanding debt.

Should this prediction come true, that would rival the roughly 9% cumulative loss rate during the real-estate carnage of the early 1990s.

Tags: commercial real estate

Posted in Attorneys, Developers, CMBX, Cresession, Bankers, Historical Perspective, Commercial Title Companies, Market Trending, Annual Recap, Commercial Real Estate | No Comments