Commercial Property Market to Favor Tenants in 2010
The New York Times reports: The commercial real estate market is coming off its worst year in decades, and the woes are expected to deepen before a turnaround takes hold.
Experts anticipate vacancies for office, industrial, retail and apartment properties will continue to rise. Rental rates are expected to fall. And prices, already down 40 percent from the peak of the market in 2007, are projected to decline even further.
That means many commercial landlords will struggle to keep their properties leased and tenants will have the upper hand.
Commercial property vacancies soared last year as unemployment worsened and businesses and consumers reined in spending. The global financial crisis dealt another crippling blow, choking off owners' ability to refinance burdensome debt and hampering sales.
By the end of the year, however, the economy had regained its footing, if tenuously. In addition, credit markets began to thaw and the pace of commercial real estate sales accelerated.
As of last month, there were more than $170 billion worth of commercial properties in default, foreclosure or bankruptcy, according to Real Capital Analytics.
Las Vegas, Detroit and Miami had the biggest share of distressed properties.
View the full article on The New York Times: Commercial Property Market to Favor Tenants in 2010
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Posted by: Matthew Stone