Commercial real Estate in trouble, opportunities knock?

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http://uk.reuters.com/article/burningIssues/idUKTRE52U72O20090331


Highlight:

1.  Boston's Hancock Tower, Price $1.3 billion in 2006.

2. Sold for $660 million last week.

3. Buyer put $20.1 million (1:30 leverage)

4. Another deal, 10 Universal City Plaza in Burbank, California, $304.85 million ( Buyer put $10.1 million another 1:30 leverage)

5. Commercial properties usually have 1:3 leverage (The above example is 10 times than normal).

"This is exactly what is happening with many other buildings across the country," Chris Stanley, an analyst at real estate research firm Reis Inc in New York. "Now that things have started to deteriorate, they will deteriorate at a much faster rate because of all the leverage in the system."

And the trend is expected to get much worse.


Comment: This kind of price or deal is happening now. If Congress and financial institute give more flexibility in Valuing Asset (M2M), they are simply in denial (psychologically unhealthy) and keep refuse to accept that today prices is real prices. How long can they live in their fantasy world?

watchdog

Thanks for sharing.

dreampen

Very old news !

Tue Mar 31, 2009 9:06pm

ppteam

Soros predicts commercial real estate price will drop at least 30% from current level.

随风流浪

agree!
real estate price will drop additional 15-25% from current level.

Amy999

so it's going to be L recession

coexist

Thanks for sharing.

听说炒股赚钱

qiangge

Thanks

like2swing

The trouble will come, but the bubble is in the making.

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3# dreampen

Latest news everywhere in this globe, basically every corner of the world is about DOW above 8000.

http://uk.reuters.com/article/marketsNewsUS/idUKN0335901420090403
US STOCKS-Dow ends above 8,000 in best 4-week run since 1933

http://www.washingtontimes.com/n ... bs-back-above-8000/
Dow climbs back above 8,000

http://www.foxbusiness.com/story ... -ahead-jobs-report/
Unfazed by Data, Dow Ends Above 8000

http://www.cfdtrading.com/articl ... _1238723475855.html
Stocks Soar Above 8000 on Change in Mark-To-Market Accounting Standard

The list go on for very very long.

Now, everyone should understand why WS and MMs pushed  the dow to above 8000 at the last 22.5 minutes last Friday. They simply want this kind of publicity, so that the psychology of the market will be bullish. When everyone bullish, there is another opportunity for those people . In fact, I admire them, they are not waiting for opportunity like me, they are creating opportunity for themselves with every power they have plus other power (such as media, etc.)

这应该是WS版的糖衣炮弹吧. 我们应该把糖衣收下，当炮弹开始响起就跟着拣战利品。

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4# ppteam

In my opinion, in commercial real estate business, replacement cost is less important than the lease agreement. People can build the best commercial building, but without proper lease agreement, the building is like a human without soul (dead man). In economic down turn, it is not easy to get proper lease agreement.

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6# Amy999

I am thinking about the third year of OB.