Will Coming Commercial Real Estate Bust Be Contained?

Banks still waterlogged from the residential mortgage bust deluge are now bracing for the next crisis. Commercial Real Estate (CRE).


On Calculated Risk, we get the primer: The CRE Bust: Quick Overview to provide proper background for Seekingalpha.com's: Bank of America: Credit Weakness Spreading to Commercial Loans.

Hmmm... Plunging commercial real estate values affecting the ability and willingness of banks to lend. Sound familiar? This is exactly the same environment that preceded the housing plunge. Transactions dried up, inventories rose, and sellers waited patiently to get their price. They never did. The winners quickly recognized conditions had changed and then bailed for whatever they could get.

If CRE turns down, prepare to see closed down retailers and restaurants, and dead malls. There are several websites documenting this trend. Here's one: deadmalls.com.

Oh, and can we all stop whinning about "lipstick on pigs" and begin addressing some real problems?