By
Monty Pelerin, on November 25th, 2009
The Christmas retail season is looking bleak just based on the manufacturing and ordering cycle. Stores are low in merchandise, anticipating a below average season. Many retailers may be just holding on through this period where typically 50% or more of total year sales occur. Here is a quote from SLIM PICKINGS AT ONCE-ROBUST OUTLETS OFFER A CLUE TO THE 2009 HOLIDAYS:
When all is said and done after the holidays, filing for Chapter 11 bankruptcy protection may be the only option for many chains, Cohen added. “I certainly see more bankruptcies down the road,” he said. “And we will also see vacancies going up at shopping centers and malls across the country. With a limited number of conventional retail, restaurant or entertainment tenants actively looking for space, landlords will be exploring alternative uses like dental or emergency clinics or, in the case of large big-box spaces, flea markets.”
The fear, of course, is that a series of retail chain bankruptcy filings will occur right after the holidays and that could trigger the commercial real estate bust that has been predicted for so long. Time will tell.
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By
Monty Pelerin, on October 31st, 2009
Image by La Citta Vita via Flickr
Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash (Update3)
By John Gittelsohn and Thomas R. Keene
Oct. 30 (Bloomberg) — Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”
“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.”
U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19.
Billionaire George Soros, speaking today at a lecture organized by the Central European University in Budapest, said a “bloodletting” may be coming for leveraged buyouts and commercial real estate.
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