(Source: Globe and Mail)
The signs of the looming implosion in commercial real estate are everywhere – or not there, to be exact.
The blacked-out logos of failed and faltering retailers such as Circuit City are now a common feature in the once-bustling shopping mall hubs that typically ring U.S. cities.
The office market isn’t yet as bad, but that could be about to change.
Nameless and vacant, these lonely structures are the most tangible evidence of the next big headache for the country’s financial institutions. Behind every vacancy is a chain of unhappy and often troubled businesses – from developers and mall owners to investors and lenders.
That’s why many analysts worry that the United States may now be headed for an even more severe commercial real estate slump than the early 1990s, when soured loans became an albatross for thousands of banks in the United States, Canada and Europe.
Read Barrie McKenna’s full article “Mall vacancies spell fresh trouble for lenders” in the Globe and Mail (April 7, 2009).