The new commercial real estate normal …

16th December, 2011 - Posted by Jeffrey S. Weil, MCR.h, SIOR - No Comments

Class A properties in much better shape, usually, and sometimes in great shape and at premium values, compared with the “Zombie Owners” (thanks Matt Thompson from our Colliers Dallas office for coining this) of Class B and for sure Class C that may be devalued due to loss of occupancy, lowered rental rates, tenant credit risk, lack of capital for necessary capital repairs or upgrades, or tenant improvements.  And as Matt concludes in his Real Estate Forum November 2011 article, “Zombie owners over the next five years who don’t have the money for capital budgets, tenant improvements and a basis that allows them to be competitive will be buried.  Then, and most likely only then, will we have the road to recovery cleared and we can begin to deal with the vampires that are too big to fail.”

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