| The dramatic change the commercial real estate | | | | costs are more expensive now. This disconnect |
| sector is seeing has been brought on in a large | | | | between buyers and sellers hasn't lessened yet s |
| part by the affects of the subprime lending | | | | there haven't been any real discounts on |
| meltdown. Dan Fasulo who is the Managing | | | | properties. |
| Director of Research for Real Capital Analytics | | | | 2008 will still bring some good deals though. In |
| feels that too many investors are throwing the | | | | fact when some properties in the U.S. markets |
| commercial and residential real estate markets | | | | are compared to those overseas, they have a |
| together when there really isn't much similarity. | | | | very favorable outlook in the globally. The more |
| The slight increases being seen in the foreclosure | | | | major markets across the U.S. like Manhattan, |
| rates on commercial properties have not brought | | | | San Francisco, or Washington D.C. are felt to have |
| a large number of significant defaults yet. The | | | | been undersupplied with new construction unlike |
| investors that are likely to experience difficulties | | | | the residential sector. |
| are those who purchased property when the | | | | Some of the different types of commercial |
| market was at its peak and used short term | | | | properties are doing better than others. |
| financing that was being offered at the time. It is | | | | Apartments and other multi-family properties had |
| believed that only if there is an extended | | | | already seen a significant market correction in |
| slowdown in the economy these investors could | | | | 2006 which brought them more into line. As well, |
| be in trouble but we haven't seen anything like | | | | the debt markets are still being supplied by Fannie |
| that yet. | | | | Mae and Freddie Mac for multi-family buildings. |
| The closest comparison to residential sub-prime | | | | The position of the investor's assets along with |
| products might be the Commercialized Debt | | | | the actual investor will play a large part in how to |
| Obligation (CDO) marketplace for commercial real | | | | best deal with 2008. Focusing on one's own |
| estate. Many are expecting CDO's to have | | | | portfolio and improving it as much as possible will |
| significant troubles as asset values have dropped. | | | | be the best plan of attack. It's always good |
| Typically, CDO's usually represent the riskiest part | | | | advice for investors to make sure they learn all |
| of the loan structure and many have expected | | | | they can about the current market and stay |
| the values for those types of assets to fall | | | | abreast of the changes taking place. Take |
| dramatically. | | | | advantage of the free reports that are available |
| The other dynamics which are coming into play | | | | online and the expert assistance from |
| during this time are also making an impact. There | | | | knowledgeable brokers such as those at |
| are problems in trying to obtain credit, the | | | | SteelHead Capital. |
| increased cost of credit, and the tighter | | | | Based on excerpts from the commercial real |
| restrictions by lenders. Throw in the current | | | | estate investment talk show Capital Synergies. |
| economic uncertainty and it makes for some | | | | Capital Synergies is sponsored this week by |
| difficult decision making for any investor. | | | | Steelhead Capital, your commercial loan |
| Sellers haven't been receiving the bids they are | | | | advantage. |
| hoping for so they have been pulling their | | | | This episode's contributing guest speaker was Mr. |
| offerings from the market. Buyers are finding | | | | Dan Fasulo, Managing Director of research for |
| that they have to put in more equity as the debt | | | | Real Capital Analytics Direct. |