Commercial real estate market

[Boricua]

Is there any chance that this subprime mortgage mess bleeds over to commercial real estate market?

[netz]

i don't think so, the commercial real estate market have its economy of its own. just like in conventional residential real estate the market value of your house is dependent on saleability of the residences around you and how people's selling and buying power is used. so as to the commercial market, is determined by the marketability of commercial area your property is located. because business property value is so unpredictable and depreciation value is higher than the residential, is always presumed that these properties have a devaluating property rather than appreciating. not unless properties are improved which will take a big amount of money to improve and that taxes will increase because of the imporvement and all other expenses. to make the long story short, it depends on the financial institution if sub prime is gonna be offered in the future but i doubt it. to be able to own a commercial property you have to have at least 20-50% dp and other monies that needs to be secured over the property;so no way, sub prime mess will bleed over. trust me.

[mccoyblues]

Yes, and that chance is 100%. The economy is extremely interdependent. What happens in one industry sector will have impacts on what happens in a completely different sector. For example, lack of rain is threatening corn harvests which is driving the price of ethanol which impacts gasoline. Sub-prime mortgages are even more closely related to commercial real estate than that!Baton down the hatches!