Commercial Real Estate – 2010 Predictions

6 months ago

It is the beginning of a new decade, yet somehow, there is still no actual clarity as to where things are headed in the world of real estate and whether the market will get to save itself from the mess it still finds itself in.

Values of commercial real estate were at its highest in 2007 but have dropped by 43.7% last year – the most dramatic drop so far.

Good news seemed to peak out of the shadows when the decline slowed down and the volume of transaction began to pick up. Sadly, these huge value declines are quite difficult to manage in an effective manner. Because of this, the same commercial real estate problems are still here this year.

However, despite all of this rain, investments of real estate are expected to get better this year, in both loans and purchases. A lot of permanent lenders are greeting this new year with bigger appetites and underwriting guidelines that are more aggressive to reel borrowers in. Permanent lenders now offer brand new loans from from 5.65 – 6.65% for 5 to 10 year mortgages, while cheaper rates now exist from community banks and multi-family property loans. Here’s to 2010!


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