COMMERCIAL REAL ESTATE - ALSO GOING SOUTH?

Today I was reading an NAR update on Commercial Real Estate (CRE) - it seems that CRE is following the path that Residential Real Estate took two years ago!

Donald Trump just asked for more time to pay his $770 million in construction loans on his Chicago Tower. Many of the leading commercial developers are having difficulties making the payments on their construction loans because absorption has been slower than expected (when the economy slows down = fewer jobs = less need for space).

To add insult to injury, we'll see many banks suffering from defaults in their commercial loan portfolio next year... this is not good news for residential real estate either - more defaults = more restrictive credit for everyone.

On the flip side, Wall Street woes and unpredictability may convince investors that, after all, real estate is a great long-term leveraged investment!