Tags: commercial | real | estate

Karlgaard: Commercial Property Crash Risks Recession

By    |   Monday, 28 Sep 2009 07:51 AM

The economic recovery is weak, small businesses aren’t expanding, and commercial property markets are poised to collapse, risking a second recession for the United States, opines Rich Karlgaard, publisher of Forbes Magazine.

“American small businesses are in for a siege. Hunkered down, they will not expand, hire or defuse the commercial property bomb. That's a formula for a second recession,” writes Karlgaard.

Now is the time that small businesses should be coming out of hibernation and leasing or buying cheap commercial property as they gear up for growth, Karlgaard writes.

“Recoveries from American recessions are typically led by small businesses. Six months from now, America should be observing that unemployment is back down to 7 percent and heading for 5 percent and toasting small businesses for creating four out of five new jobs,” writes Karlgaard.

“But this time, small businesses aren’t doing that. We should ask why.”

Karlgaard forecasts that commercial real estate values will “sink more than expected” since small businesses aren’t expanding, and that unemployment will creep up to 10 percent and “stay there.”

Commercial real-estate prices dropped again as transaction volume dried up in July, falling 5.1 percent month-to-month after only a 1 percent decline in June, according to The Wall Street Journal.

"The market has averaged about 375 sales per month for the seven months in 2009," Moody's managing director Nick Levidy told the Wall Street Journal.

"Over the same time period in 2008, sales were averaging nearly 1,100 a month."

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Economy
The economic recovery is weak, small businesses aren’t expanding, and commercial property markets are poised to collapse, risking a second recession for the United States, opines Rich Karlgaard, publisher of Forbes Magazine. “American small businesses are in for a siege....
commercial,real,estate
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2009-51-28
Monday, 28 Sep 2009 07:51 AM
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