Monday, February 02, 2009

It Isn't Just a Residential Crisis

There's been a lot of noise about the housing market, bad mortgages, and banks failing as a result. People haven't been paying as much attention to the next real estate tsunami: commercial loans. The retail failures and dark spaces have been chipping away at commercial, though, and now it can't be ignored. The state seized commercial development lender MagnetBank Friday. If that isn't bad enough, the FDIC is having to eat this one because it can't find a buyer. What does that mean? Game over. In spite of the bailout money, no other bank could be convinced to buy in. The commerical picture is that grim. And what does that say about the effect the downtown mall and office buildings will have on the market? Or the odds of completing Cottonwood, Valley Fair, Sugarhouse, or the downtown Ogden projects? Or of filling the growing collection empty, faux-Tuscan commercial buildings that have sprouted up everywhere? There will be blood.

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