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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 362.31-1.8%4:00 PM EST

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To: carranza2 who wrote (44547)1/1/2009 1:43:40 AM
From: energyplay1 Recommendation  Read Replies (2) of 217537
 
With low default rates, and good cash flows, commercial real estate will be okay as soon as the banks start lending again.

Assume you are running a bank, and you are getting political pressure to loan money. You have laid off the 2000 people you need to make residential loans. So you can't make a bunch of small loans.

Most important, large sums can be loaned out quickly.

A commercial loan will have extensive documentation. It may also have some name brand tenants, which provide some protection for the loan officer if things go wrong - a version of you can get fired for loaning to IBM.

The short loan terms are also a plus, since the loan will be paid off about the time the FED's cheap money policy ends.
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