Another Commercial Real Estate Boom Might Be Years Away; But The Threat Of The Current Crisis Might Be Overblown (Thursday's News & Notes)

One of the biggest media debates recently has been about the extent of the problems in the commercial real estate sector. Some financial experts have argued commercial real estate might be the next bubble to burst, resulting in a mass number of foreclosures on malls, shopping centers, office buildings and hotels. Others feel the threat of commercial foreclosures, though serious, might be overblown. Today, we've seen some new input on this debate.

  • Reuters ran a story predicting it will take an entire generation before we see another real estate boom like the one the industry experienced in 2006 and 2007.
  • At the same time, Net Lease Insider argues fears about commercial real estate are unfounded. The assets still have inherent value. It just falls short of the ridiculous projections inherent in the loans underwritten during the boom.
  • The New York Times also has some reassuring news. Retailers' same-store sales might soon improve. But not because consumers will suddently start shopping more. The 2009 sales statistics will likely improve because we'll be comparing them to one of the worst years on record.
  • In the meantime, The Boston Globe reports another chain has filed for bankruptcy protection.
  • And Laberscar discusses the problem of how to deal with empty department store space.
  • On a somewhat related note, the Big Fat Marketing Blog warns some stores might look like ghost towns this fall. But not because the retailers have moved out. Rather, because they've been so conservative with their merchandise orders for the rest of the year, there might not be enough products to fill the available space.
  • Retailers continue to open stores at the Gateway Center in the Bronx, however. We did a walk-through of the property and posted an interview with president of Related Retail, the project's developer, last month.
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