Categorized | Commercial

Commercial Real Estate Improving but Still Susceptible to Risks

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The commercial real estate market in the United States looks to finally be improving. However, economists warn that the commercial property market could still be very vulnerable to the various economic and political risks that continue to impact the world.

Such issues as the European economic crisis, the upcoming national budget and taxation issues, and the large number of commercial mortgages set to mature this year all may cause the commercial real estate market to falter yet again. Additionally, economists warn that job creation must continue to improve for the commercial property to continue its growth.

The most recent trends have been favorable for the commercial real estate market, which does lend some hope to the future of the market. In fact, most expect that some improvement will take place in the coming months.

According to expert economists, one of the most frightening factors is the maturation of more than 1.2 trillion dollars worth of commercial mortgages that will take place over the next three years. The majority of the properties with these mortgages are currently underwater.

As such, many analysts and experts are calling on officials to intervene with new measures that will prevent the potential crisis that could come with the maturation of the underwater mortgages. However, there has been no indication that any such measures will come about to help save the commercial market.

There is still hope for the commercial real estate market to continue improving, though it could also still face enormous difficulty if the right course of action is not taken.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

One Response to “Commercial Real Estate Improving but Still Susceptible to Risks”

  1. Jim says:

    Drew:

    Great article. Have you noticed that financial people have begun to speak of $1 trillion dollars as casually as they spoke of $1 billion dollars 20 years ago? I did a simple calculation to put 1 trillion dollars in perspective. 1 trillion – 1 dollar bills laid end- to-end would stretch over 96 million miles – that is roughly from the earth to the sun + 3 million miles! $1.2 trillion in commercial mortgages coming due is going to hurt a lot of investors but also offer some unique opportunities. We will be following the commercial mortgage industry and hopefully assisting many who will need refinancing, restructuring and cashing out of private notes. Thanks again for the great info.

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