Investor Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash

[marmar]

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.

“The American consumer will no longer be able to serve as the motor for the world economy,” said Soros, 79. ............(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aoRYl03Rw1_g

[KG]

1. green shoots!!!!!!!!!!!!!!!!!!!!!!!!

:P

[SoCalDem]

2. And all because of greed.. pure unmitigated greed

When tax rates were high for the upper classes, and we had a true middle class, we were prosperous..but greedy bastards wanted more more more, and conned two generations into believing that they too could have more, if only we had..

tax cuts and then more tax cuts and then more tax cuts...


the rub is this...

the tax cuts always benefit the richest of the rich , the most..and what did they do with all that "saved" money? They BOUGHT us, our Mom & Pop businesses, our hometown factories, our public utilities, our commodities co-ops... and then they made us all their indentured servants....they sent the manufacturing processes overseas where they could force 10 yr old kids to work for pennies a day..

In exchange for removing our economic base, they gave us big-box stores filled to the brim with imported toxin-laced crap...

and now we find ourselves at the point where our jobs are devalued, our bank accounts, empty, our homes worth less than we owe on them, our retirement funds wiped out, with debt up to our eyeballs, and they wonder why we are not dutiful shoppers these days..

They will just empty out those hulking concrete boxes, ship the merchandise somewhere else, and slink off in the night, leaving bamboozled communitiues to deal with what they left behind.. The Home Base here , all 108K sq. ft. of it has sat empty for over TEN YEARS now.

[AllentownJake]

3. Spring 2010 is going to be murder for the commercial Real Estate market

I expect to see a lot of empty retail space after Christmas 2009.

[TheWatcher]

4. Some of us have been warning about this particular shoe to drop for many months

And we continue to be laughed at and mocked by the "Whatever they tell me that makes me feel good, I will believe, and everyone else is a DebbieDownerObamaHaitingRepublicaninDisguiseDoomPants" crowd.

At long last, it has NOTHING TO DO with "Wanting the Economy to fail."

The Economy CONTINUES to fail, and we are being LIED to about it, and told that we are in a RECOVERY.

There is a BIG difference.

[GoCubsGo]

5. You mean it hasn't crashed already?

In my town, there are empty buildings galore. It's just like the 1980s all over again. They slapped up a bunch of new strip malls, and everyone moved into those, leaving the old ones vacant. After moving, half of them are going out of business. Same shit, different decade. Only this time, it's worse.