I would imagine one could operate some commercial properties at 70-80% occupancy and still have strong cash flow depending on the financing structure and location. Many commercial properties are held by multiple investors or syndicates so it is possible to have low occupancy of a property if the investors have strong income from properties in other areas. I am seeing a trend locally were retailers are backing out of commitments to occupy spaces in new developments and it will be interesting to see the consequences of litigation tied to these broken contracts.
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the real recovery will commence when home equity evaporation stabilizes and banks began lending to small and medium size businesses for growth purposes not just for survival needs.
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I’ve noticed a significant increase in the foreclosure lists locally within the last few weeks. Yes the organ failure continues and yes I think consumer spending gets much worse before the end. As the Wildcats might put it bear down.
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If this trend can be corroborated by undisputable evidence and in fact continues at this pace we are in for a major paradigm shift on how we use physical books to process information.
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If the protectionist implement the Buy American Clause with the US stimulus package this could negatively impact the cost savings trends helping consumers. I would also like to see more creative programs aimed at commercial developers and owner occupied commercial spaces. This would help expedite the success of BIPV locally.
Maybe China is buying F16s to intimidate Taiwan from declaring independence from the mainland. We may not be as far away from WWIII as you think. This would all be very bullish for gold and silver regardless of the inflation headed our way.
This scenerio does not acknowledge how the developer that filed bankrutpcy last month foreclosed on 18 condos in Mike's building and that comp sales are actually 60k not 122k. It could take longer than 5 years for Mike to get that 230k you sited.
If the economic trends continue to be negative in Las Vegas the turnover for future retail tenants at City Center could grow presenting another challenge for generating cash flow from this enormous construction project later this year. I also wonder if the difficulties in securing condo financing for those Crystal’s buyers could cause the percent closure on existing contracts to drop below 75%. If these challenges persist I think they may have to consider selling off more assets than just TI to maintain liquidity.
i too found roger's hot commodities a good read and insightful in some of the recent trends we've seen in commodity markets over the last 5 years. it was interesting to watch the demand side of the commodities market fall off over the last 12 months. i wonder if this is a buying opportunity considering we maybe within 18 months of a turn around in world markets. i will make a note to check out this piece on china.
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