Posted on Wednesday, 09.30.2009
The Next Wave, Commercial Real Estate Meltdown
Although the residential Miami, Florida housing market is showing signs of recovery, Miami commercial real estate
is still in crisis. Over populated by empty storefronts, diminishing rent prices and difficult to obtain credit, a sizable number of South Florida Miami commercial real estate
property owners face default on their bank loans. Many fear that this could trigger another round of bank failures and further obstruct the economic recovery of the region.
South Florida's banks have invested in Miami commercial real estate
properties such as hotels, shopping centers and office space, over the years, According to analysis conducted for the Miami Herald, Florida financial institutions have twice as many commercial loans in their portfolios as out-of-state banks.
The seizure of Chicago-based Corus Bank by federal regulators is a recent example of the commercial real estate crisis. Corus was a major player in Florida's Miami commercial real estate market and was undone by heavy lending for construction and commercial real estate.
More and more ‘for sale’ and ‘for rent’ signs are appearing daily in South Florida. Development projects are also in trouble and face either cancellation or foreclosure such as the former Grand Bay Hotel in Coconut Grove.
The health of the Mimai commercial real estate market often provides a good look at the capability of the local economy. With South Florida employers continuing to lay off workers, more office space goes unused. This causes less people to have less purchasing power, effectin retailers causing them to have difficulty just hanging on, let alone opening new stores.