New Players In Commercial Real Estate Mortgages
The commercial real estate crisis is making some investors rich. Apartment dwellers are consolidating and waiting for job security. While they wait, apartment occupancy rates are dwindling. Struggling apartment complex owners are throwing the kitchen sink at prospective tenants offering months of free rent and never-before-considered expensive upgrades.
On the retail scene, consumer confidence is low as tight-fisted consumers wait for better employment reports. Look around any strip mall and you will see available space.
As lenders scrambled to keep mortgages performing and began to make powerful concessions, new players arrived on the commercial real estate scene. These lenders see opportunity. They also see falling prices, lower exposure and potential for big gains, just like savvy investors.
With vacant space, supply has increased and prices are climbing back to fair market value. Existing property owners cannot get out from under their debt and are helping buyers negotiate favorable concessions at new, reduced prices.
In mid August 2009, insurance companies and securities sales by the Federal Reserve have opened doors for investors looking to acquire office space, retail space or apartment buildings. Overall, the commercial real estate market is completely different than existed just two months ago.
As equity markets rebound, speculation is that the recovery is underway and that the current availability of commercial space will soon be challenged. New construction for commercial space is recovering slowly, leading investors and lenders to take closer looks at their commercial portfolios.
The commercial real estate market in California has been struggling to find the floor since the recession began. Analysts like Darrell Wheeler of Maguire Properties, Inc. project that the new infusion of investment capital will spur the commercial market recovery.
“These disposition options would not have existed just two months back, so market conditions are changing very quickly,” said Wheeler. Opportunity is knocking on commercial real estate doors. Walk on in.
