Put off any large purchases because within 6 months there will be huge discounts on most everything. Commercial real estate will be no exception, aside from industrial. Expect to see half vacant retail centers, office buildings and multifamily buildings. Sadly when a commercial property gets foreclosed on it creates a domino effect in the area around it. It happens because the foreclosed property’s value becomes about half of the surrounding properties. Because it was bought for half the price the new owner can afford to price 50% less than his neighbors. This hurts their value and creates a downward rent trend in order to compete with the foreclosed property.
In the next few months you will see many companies and property owners go down that most never thought would. Many are overleveraged with debt and cannot survive without lenders giving them a new lifeline. But the banks are losing lots of money too so that isn’t going to happen. There is no way to sugarcoat this situation folks, we are heading for a really bad situation so please do everything you can to prepare for it now. As always thank you for reading, stay safe and have a great day.
