2010 will be the year to watch in commercial real estate. With all the talk of full recovery in 2010, we still have a declining retail market, high unemployment and commercial loans coming due. If we can see the earnings come in where the market has priced them and jobs start getting created then maybe we will be in the clear.
But, with more debt and taxes set to be put into effect, we will see continued pressure on the U.S. consumer and that will most likely put a damper on companies plans for expansion and that will have a direct impact on the commercial real estate sector.
Hundreds of lay offs in the manufacturing industry in Austin this year are to blame for a 108-percent increase in the number of commercial foreclosures for 2009, the highest of any Texas city.
“I would suspect that this trend is going to continue in 2010 and 2011″, predicts Angelos Angelou, an Austin economist who for the past 25 years has held an annual economic forecast breakfast for Austin in January.
“500-billion dollars in commercial mortgage loans are coming up for refinancing and another 800-plus billion in 2011 and with lower values and lower occupancy rates I just don’t know who is going to refinance those loans. A number will have to be foreclosed on. Others will have to put more equity into properties”, added Angelou.
According to Foreclosure Listing Service Incorporated a total of 851 Austin commercial properties filed for foreclosure in 2009. That compares to 410 in 2008.
Angelou says there is a positive side to the news.
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