March 13, 2009
Landlord Foreclosure Concerns: Not Just For Residential These Days
"With downtown commercial property values down 30 percent from their highs in the summer of 2007, highly leveraged owners who bought at the peak are up against huge debt payments that will be extremely difficult to refinance. That is creating a situation where tenants are avoiding some “upside down” buildings altogether and taking extra steps to protect themselves against landlord foreclosure."
∙ Invasion of the ‘zombie buildings’ [San Francsico Business Times]
First Published: March 13, 2009 10:00 AM
Comments from "Plugged In" Readers
Could someone with access be so kind as to C&P the entire article from the SF biz times?
Posted by: 45yo hipster at March 13, 2009 10:41 AM
How would tenants know if commercial landlords were upside down?
Posted by: waiting2nest at March 13, 2009 11:29 AM
Here it is:
Posted by: Bill at March 13, 2009 11:53 AM
Even a dufus like me could see the Commercial Real Estate problems coming from pretty much a hundred miles away. Calculated Risk has been talking about it lagging the Residential collapse forever. My CRE short positions are up an average of 35% and I only got into them in January, way after you'd think anyone with any market predicting skills at all would have made their move.
Posted by: Valentino at March 13, 2009 5:12 PM
Agreed, Valentino. I have been happily short commercial REITS since early- to mid-2008. Part of my portfolio looks like a little graveyard of REITs that have collapsed 70%+ (GGP short was up 98%+, but I did cover that one a few weeks ago), and I'm just hedging a bit by selling puts waiting for the one year anniversary, so I can cash them out at long term capital gains rates. It has been a very enjoyable wipeout, and the faster CRE collapses the better.
Posted by: LMRiM at March 13, 2009 5:19 PM
I agree that the CRE market got really stupid in 07. Related, mcklowe, GGP, etc. all got jacked big time. It just goes to show that big money and analysts with mba's from fancy schools don't mean sh!t.
As a small market player I have little sympathy for the 'big boys'. They smoked on the crack pipe of impossibly high 'projected rents' and consequently got their asses handed to them.
Posted by: 45yo hipster at March 13, 2009 6:11 PM