The Washington Post thinks commercial real estate's boom is over. I think that's a bit of an overstatement. It has certainly become a more challenging market. And commercial real estate has proved its doubters wrong more than once in the past seven years.
Here's the next shoe to drop as a result of the bursting of the credit bubble: commercial real estate.
It won't be anywhere near as dramatic as the fallout in the residential real estate market. But, at the same time, it won't simply be a temporary disruption in financing followed by a modest correction in pricing that the industry is now predicting.
In markets like Washington, New York, Boston and San Francisco, the last four years have been among the best the industry has ever seen -- falling vacancy rates, rising rents, soaring values and a ton of new development. Now, that's all about to come to a grinding halt as financing becomes more expensive and more restrictive, the economy slows and a big slug of new inventory hits the market.
"It's over," one local developer told me this week. "It was a great ride, and now it's over."