Commercial Real Estate is Dying
On my way to the gym each morning I take notice of the commercial property on the street. It seems like every single day a new ‘for rent’ sign goes up as another small business closes. Now there are almost entire strips of places empty and many can’t seem to decide if they are for rent or for sale as they have both signs up. (Of course, if you ask about the price you’ll see they have no real interest in selling because its ridiculously overpriced.)
It’s not just in my neighborhood, it’s in the whole city. I always think to myself, “Man it would suck to be the owner of commercial real estate right now.” They must be taking some serious rental losses. If you own resident property it’s probably not great but people have to live somewhere.
I’m amazed at how stubborn property owners are. I browse the property listings periodically and there are property that have been on the market for rent for at least a year and they never lower the asking price, all the while the properties all around them empty out as well.
In the US , commercial real estate values are down 44% from their peek, if that’s any sign of what’s to come here.
This recession is going to be long and deep, at least here in Spain. Hopefully we can position ourselves to take advantage of it. In a few years, who knows, maybe there will be some great property, residential or commercial, ripe for the picking… We have to keep learning and prepare the best we can.
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