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The Commercial Property Bubble Is Next!
i agree with her, when the economy takes a turn for the worse in retail and location based businesses (has been for a while now) commercial RE always hurts. The normal vacancy rate to value a commercial property is around .5...but in down times...that can skyrocket up to .7 or even .8 in underdeveloped areas.
Yeah commercial property's have been on a steady decline over the last couple of years. I am not sure how they are saying it's next since it's already been in motion. Either way it's a good time to buy real estate residential or commercial and probably will be for they next few years. However, as Bullish stated you would need to expect a high amount of vacancy when you calculate to see if it will be cash flow positive.
Speculative, capital-driven projects that don’t fit an existing market need are just one risk that developers should avoid. As more developers return to fundamentals, here are three ways projects can go wrong and how to avoid them.
Yup she is right, I appreciate the thought presented here and completely support that.
