Soros’ scary warning on commercial real estate
If you think the residential market bust has wreaked havoc on the economy, just wait until you see the commercial real estate version.
That seems to be the gist of billionaire investor George Soros’ rather scary warning that commercial real estate values, from office towers to suburban office parks, will plunge 30 percent in value. If you thought the banking system was having problems now, just see how they deal with this lump of coal.
“Commercial real estate has not yet fallen in value,” Soros is quoted as saying in a Bloomberg story. “It is inevitable, it is written, everybody knows it, there are already some transactions which reflect and anticipate it, so we know, they will drop at least 30 percent.”
It’s an observation that we can already see playing out in the Boston market, with the Hancock tower poised to hit the block in a foreclosure auction next week.
The only good thing is the commercial property bust is now in its early stages, while the housing market shows signs it may be finally nearing the bottom.
At the least, maybe we can get a short breather between the two.