Real Disagreement
Some Wall Street analysts predict that commercial property prices will decline by as much as 26%, causing banks and brokerage firms to lose $80 billion from problem loans.
That seems to be a logical extension of the turmoil in the residential real estate market. However, others argue that the commercial real estate market is not as valuable as the housing market.
There is not as much pressure to package commercial loans. Moreover, commercial real estate loans tend to be fixed, rather than adjustable, and they usually are not refinanced for long periods of time.
If worries about commercial real estate prove to be exaggerated, bank and brokerage firms may perform better than expected, which would be good news for investors.
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That seems to be a logical extension of the turmoil in the residential real estate market. However, others argue that the commercial real estate market is not as valuable as the housing market.
There is not as much pressure to package commercial loans. Moreover, commercial real estate loans tend to be fixed, rather than adjustable, and they usually are not refinanced for long periods of time.
If worries about commercial real estate prove to be exaggerated, bank and brokerage firms may perform better than expected, which would be good news for investors.
* * * * *
posted by Bob Moser at
7:00 PM
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