Far From Over

You'd think there'd be a poker post in here somewhere. But no... Mookie was quick and painless last night, and then I blew a chunk on a bunch of super turbos. Doom switch still in full effect for me, and nobody wants to hear details of it.

So let's talk commercial real estate instead. Looking around the Intertubes, this seems to be the next kick to the groin for the economy. Commercial real estate relies heavily on debt financing and loans. The strip malls, the big box stores that pop up everywhere, the shopping malls, the outlet malls, etc, etc.. But debt and loans have dried up, and the banks holding the mortgages are in trouble.

And this just gets compounded by the recession, economic problems, gas prices, and everything else we hear about. Why? Well, Christmas season is fast approaching, and it's well-known that this is the make-or-break time for retailers. When people are tightening their belts, cutting back on their driving, and fighting to keep their homes, Christmas presents and luxury items fall by the wayside. That 50" flat panel can wait a year or two.

So if shopping drops, retail profits fall through the floor. Stores close with nobody to replace them, and rents dry up. No financing to get through it, no rent, and commercial properties close up as their owners declare bankrupty. Look for more nail salons, bail bondsmen, pawn shops, and payday loan offices as property owners scramble for tenants.

So I think the full brunt won't be felt until the new year, once the money is counted and fiscal realities kick in. More dead malls will be showing up, and nothing quite destroys a neighbourhood like large abandoned buildings.

Nope, still far from a bottom out there folks.