I drove by the mall in my home town of Huntington Beach and noticed that several of the major "anchor tenants" were gone and their thousands of square feet of stores were boarded up. I also noticed that maintenance on the western half where the vacant stores congregate is abysmal. If foot traffic is discouraged for the remaining merchants, this may be a downward spiral that increases speed. On top of residential foreclosures, commercial real estate may add a giant negative impulse onto the fiancial recovery. At the beginning of April, the foreclosure auction of the John Hancock Tower, the tallest building in New England, resulted in a resale for about half of its last sale value three years ago. Then, about a week ago, General Growth Properties, which ownes about 200 large malls in the US, filed Chapter 11 bankruptcy. What can we expect in the next year, or so, for commercial property? Jump and see.
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