Bad news for commercial real estate
The Wall Street Journal is reporting that commercial propertiesÂ are showing signs of a downturn.Â Commercial sales are at a stand still as lending hasÂ dried up.Â The Journal predicts however that the commercial down turn will not be as bad as the current decline in the housing market.
I take issue with The Journal because I believe the commercial real estate declined is now international as we see in Japan.Â The Fed is notÂ talking about a mild recession rather a severe one.Â Credit markets are getting worse, the FDIC is predicting bank closures, and major banks are or will be under-capitalized within a month.Â
Is it possible that the media doesn’t believe that there aren’tÂ commercial real estate deals whichÂ will now go bad just as the housing sub-prime market? Â I could be wrong but the everythingÂ I look at tell me that a major correction is on its way.