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Report Says Commercial Properties Market Is Gaining Momentum

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By : John Cutts    99 or more times read
A report by the Real Estate Corp. and the CCIM Institute has asserted that the commercial properties market of the U.S. is starting to recover, with more pieces of real estate from the segment being sold faster than other real property sectors. However, the report also stated that increased interest from buyers is tied up with sellers' willingness to lower the prices of these properties.

The report also stated that financial institutions and banks were the first to realize that the properties taken back from borrowers are now worth far less than around three years ago. They were also the first to decide to cut down the prices and sell them off for a loss in some cases. The authors of the study have revealed that this is so because such institutions can afford to take the loss, unlike smaller partnerships and individual property sellers.

Authors of the report further revealed that the increased activity within the commercial properties market is partly due to individual property owners finally accepting the fact that they can only sell their properties if they cut down their asking prices. They stated that the lack of activity in the past couple of years was not because there were not enough investors, but because of the loan leverage and pricing factors.

Analysts have asserted that money for buying commercial structures have always been available, it was just that some sellers were initially unable to accept the fact that they needed to sell at a loss. Now, most property owners are aware that the market will not go back to how it was before and that they cannot wait for the prices of properties to be worth the same as their initial value. This realization is hitting both the selling and the leasing sectors.

The first half of 2010 saw leasing property transactions increased as a result of property owners lowering their asking rates per square foot. This led to higher number of transactions, particularly in areas that posted significant price declines, such as Miami where rates for commercial properties dropped by 11% in 2010 when compared with 2009, and Naples, where prices declined by around 5%.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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