Wednesday, November 11, 2009

Commercial Real Estate Crisis Overblown Says One Industry Expert

Sam Zell, a “legendary real estate investor”, recently commented on the dire predictions attached to the coming commercial real estate crisis, stating that they are overly pessimistic. Specifically, he cited the cause for the current commercial real estate ailments as a “demand recession” but one not driven by drastic oversupply. According to Zell, there haven’t been major new supplies of commercial real estate since 2007.

However, he also notes:

“By 2011 and 2012, the lack of supply will fill those buildings. That's the good news. The bad news is that the buildings will be filled at very low rental rates -- so lenders won't get paid back."

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