Joseph asks…
Are commercial real estate prices destined for the same fate as what’s happened in the housing market?
The CMBS market is paralyzed and the CMBX says prices will fall 23 percent over the next three years. There are a lot of interest only commercial real estate mortgages in CMBS portfolios and many will begin amortizing this year. If a recession is upon us and those borrowers can’t meet their debt service requirements under the new amortization – it seems to me we have a repeat of what is happening in the subprime universe.
Wize Guy answers:
The commercial real estate market is much broader and dynamic than the residential market. There are many property types, whose valuations seldom move in unison. The basic property types are: retail, office, industrial and multifamily residential. The health of each of these markets is determined, to a large extent, by supply and demand. Supply is measured by vacancy rates, while demand is a function of the underlying business climate.
A recession hurts demand, however these markets are very slow to react. In our current economy, the issues we have seen have been largely on the consumer side. Corporate borrowing tends to be more conservative and more heavily scrutinized by the banking industry.
I expect that the commercial market will remain stable through this downturn and not experience the foreclosures and value deflation that we’ve seen on the residential side.
Paul asks…
What is the process to get into commercial real estate in california ?
I am getting my real estate license as an agent (sales person) soon and i want to get into commercial real estate. Im trying to find out the process of getting into commercial as in what license it requires, certificates, and anything else of that nature
Any tips would be greatly appreciated
Thank you for your help
Wize Guy answers:
your office broker may care what you wish to specialize in as a licensee but the state
does not.
does that help?
better know biz–read some books on commercial investing and on biz in general
i can tutor for free
Richard asks…
How bad will the commercial real estate crisis be that starts next year?
A trillion dollar commercial real estate crisis will begin to unfold in 2010, when short term loans must be refinanced, yet commercial property values have plummeted.
As many as 500 regional banks may fail as commercial loans default, and the FDIC only has 10 billion left to cover insolvent banks. Compounding this Deuthsche Bank forecasts that 48% of home mortgages will owe more than the home is worth by the end of 2011.
Wize Guy answers:
Commercial real estate crisis will be insignificant compared to full blown crisis of national debt and economic collapse.
The crisis will start within two or three weeks, not in 2010
This country is finished.
Ruth asks…
How long does it take to get a commercial real estate license?
Can you simply go to one of those week-long real estate schools like residential real estate licensing? And what are the qualities that help a person succeed in commercial real estate sales? Is this a young person’s game? Can you start and succeed at middle age? Would like to bank 70k-100k? Is this reasonable?
Wize Guy answers:
In most states the licensing for a commercial Realtor is exactly the same as it is for a residential real estate license. Just getting licensed isn’t going to allow you to walk into a 70k-100k/yr job, but will likely see that or more if you know what you are doing. Being a Realtor is a 100% commissioned job and it takes time to build your business. Amongst the successful commercial Realtors I know, like my brother, they all have the CCIM designation which is what they refer to as the PhD of commercial real estate.
As far as starting in middle age depends alot on how well you have networked thus far. The majority of commercial Realtors I know are between the ages of 33-60.
George asks…
What is a good school to learn Commercial Real Estate that I can take online or through distance education?
I know there are a lot of real estate schools out there but I am looking for one that will teach me the most information they can on commercial real estate in specific. It has to be a school I can do online or through correspondence. Thanks!
Wize Guy answers:
For on-line courses visit
http://www.careermantra.com/aptitude-test.php
For school learning tools visit
http://edumantra.in/
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Tags: commercial real estate, vacancy rates, housing market, banking industry, residential market, sales person, real estate license, real estate in california, business climateFiled under: Answer Guy
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