Monday, September 28, 2009

Commercial Real Estate Crisis Looming?

Commercial real estate is the "second shoe" to drop in hurting the economy, Daniel Tishman, chairman and CEO of the Tishman Construction Corporation told CNBC.

"We're getting through the single housing real estate market OK but the numbers involved in commercial real estate in all sectors are staggering," Tishman said. "Trillions of dollars are involved in commercial loans. The roll over of those loans in the next 5-7 years is going to happen and the money just isn't there for refinancing."

"I think they (banks) are very exposed," said Tishman. "There are huge numbers of banks that could have problems (and face closings) going forward because of carrying these commercial loans."

I anticipated this crisis back in 2006 - link


Mammoth said...

One simple barometer of how commercial real estate is doing:

The 'Crane Count"

At this time last year there 11 construction cranes visible in downtown Seattle (when viewed from the ferry).

Now there are only 2.

'nuff said...

Russ said...

The small banks that ventured off the porch to pee with the big dogs and chose CRE to get their portion of the "cash" are going to regret it.

The thing to remember is it is regional and the bank closing so far this year are evidence of this.

Anyways, it looks like we are in for a long tough slog for at least the next 6 years.

I want to thank Economicrot for alerting me, now several years ago and I'm prepared for total ruin of our economy. God! I hope not!

Randy said...

Thanks for the Seattle barometer Mammoth,

I haven't been keeping count here in Vegas, but know that we have had several "Billion dollar" projects completely dry up - merely dust in the wind today.


Thanks for the kind words and I too hope that my forecasts are incorrect.


Anonymous said...

That guy was creepy (the way his eyes darted around).
Obviously he is fishing...for a bailout. A bailout for his industry.

This isn't about fairness. As always it's about political pull (i.e. how much you have previously paid out to elect Congressmen).

This guy is like a Bill Gross talking his book.

It's pathetic that this type of behavior is what gets rewarded in this country.

Hell, I vote for complete meltdown,armageddon,teotwawki.
I'd rather take my chances in the helter skelter of anarchy than continue to see this publicization of losses mindset that's been prevalent lately.

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Audree said...

Yeah! I agree that real estate really attracts huge investments. Thanks for sharing this informative write-up. It is really a knowledge gaining one. Keep it up!

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