I’ve read more than a couple articles predicting gloom and doom for the commercial real estate industry. Many are concerned
with an impending collapse of the commercial real estate market and what that is going to do to the many banks that have billions in loans supporting it. Not being an expert on anything related to the subject, all I could do was ponder whether these people are right about what’s coming.
This weekend we had lots of errands to run. Normally I do most of the driving but this weekend my wife wanted to drive so I sat back in the passenger seat and just admired the landscape. (Okay, not exactly “admired” because it wasn’t much to look at, but you get the idea).
Anyway, since I had the time to really look around as we made our way around the city, I started noticing a lot of “For Lease” signs. I decided to start looking for them as we drove along and was honestly surprised to find that EVERY commercial complex, whether it be retail, office or warehouse space, had “For Lease” signs up. Literally, on one street that was about 10 blocks long, every single complex had vacancies.
I can only imagine the various scenarios that the building owners are facing from building to building. Certainly there are some complexes that are doing just fine. I’m sure that some of them have more equity in the buildings and less loans so that they could probably get by with 50% occupancy, while others are so leveraged that they need close to 100% occupancy in order to cover their expenses. Regardless of the scenario, it’s doubtful that I’ll ever see any more signs of the commercial real estate struggle than just the “For Lease” signs out front, or a small blurb in the local paper when a building changes hands.
Maybe I should have looked in to buying stock in sign companies. With all the “For Lease” signs and all the “For Sale” signs out there, the sign companies must be doing pretty well!
