Foreclosed and Bankruptcy Houses Rise As Commercial Market Improves- By: John Cutts
For most areas of Arizona, foreclosed and bankruptcy houses remain in high numbers. However, the commercial real estate industry is showing some improvements, particularly in key markets like Phoenix. According to realtors, the improvement is more evident in investor activities rather than profit numbers.
The commercial market started sliding in the state around three years after foreclosure homes in Glendale and in the rest of the region started rising in numbers, realtors stated. This prompted investors to hold off buying commercial structures, hoping that prices would drop further. However, majority of them realized that the commercial real estate sector would not drop further, leading to most of them finally making a move on commercial spaces that resulted in improved activities during the 2010 fourth quarter.
According to local brokers, the panic over the impact of huge supplies of Arizona home foreclosures on both the residential and commercial property market seemed to have dissipated. Activities in the commercial property sector, particularly in Phoenix, picked up last quarter, demonstrating the optimism emerging in the commercial real estate industry, realtors have reported.
Despite the presence of foreclosed and bankruptcy houses, investors have put down their money on commercial structures and apartment buildings during the last quarter of 2010. BH Properties LLC has recently purchased the Fiesta Park apartment building in Mesa, while several other businesses have signed lease contracts for commercial spaces. Realtors reported that most businesses are trying to take advantage of the low leasing rates before they start rising again.
Activities related to buying foreclosures and leasing commercial spaces are highly evident in Phoenix, with the area leasing around 5.9 million in square feet of office spaces last year. According to real estate industry observers, the trend rivals peak activities during the years of 2005 and 2006. Last year also marked a turnaround for commercial leases after two consecutive years of decline, with majority of activities coming from local moves instead of expansions, realtors have reported.
In addition, realtors revealed that talks of further commercial construction activities have escalated during the last few months of 2010. They reported that apartment projects are on the works, which are expected to rival foreclosed and bankruptcy houses in terms of providing residences to people moving into the region.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.