March 2008 I talk about a slowdown that is being seen in that sector of the market
October 2008 I discuss how the slowdown is impacting malls
In late November I talk about the commercial real estate markets tanking and Ross Perot, a multi-billionaire based here in Dallas, getting impacted as one of the funds he invested in was hit. Then he got hit the following week or two in ANOTHER fund that closed due to redemptions.
Here is a 12/2008 observation of mine re: commerical real estate.
Finally, my take today.....
1) I've seen a few restaurants NOT opening in the Plano area that were scheduled to.
2) I have heard of a restaurant chain that was opening 2 restaurants a week in early 2008 scaling back to 1 or so by 2009.
3) I don't see strip centers filling up at the same rate they used to.
4) I've heard from friends/associates in the industry (or friends of them) that TONS of deals aren't happening. People can't get access to the capital, which is a good thing in my opinion. We need to "fill in" the capacity we have (open store sites), re-model what is already outstanding and then FIND NEW tenants for the locations that will inevitably end up closing in 2009. All we have to do is look around to see the impact.
The commercial real estate market of the last few years was driven by consumers being on a HUGE spending binge. The consumers are more leveraged than ever, their credit is being cut off and that reduced spending is going to work its way "through the system." Some spending will happen but I think we are talking about a MAJOR seismic change for 2009. Fast growing areas will see new projects but ALOT of businesses will be impacted as the U.S. consumer pulls back and tries to save $$$ vs. spending more than they make, going into debt galore :) I think, at a minimum, that is a 20% shift in consumer spending. Think of negative savings vs. 4%-5% savings. That alone is nearly a 10% swing and then, if you take into account that consumers must begin paying off their debt in 2009 (As Oprah/Suze Orman are proposing to their viewers) than you could easily see spending cut by 10% just to PAY off previous spending.