Investors Await Commercial Real Estate Foreclosures

The 2009 Emerging Trends in Real Estate report released by PricewaterhouseCoopers LP and Urban Land Institute stated that the market value of commercial real estate is expected to bottom out in 2009, which could result in the increased flow of foreclosed properties into the market.

Over 700 experts in the commercial real estate surveyed for the report are expecting real estate values to fall from 15 to 20 percent. They also expect drastic declines in the secondary and tertiary commercial real estate market.

In anticipation of these trends in the commercial real estate industry, investors have been raising funds to acquire foreclosed properties at discounted prices.

Real estate brokers have confirmed the sudden interest of investors on commercial real estate foreclsoures. However, most of these investors are not interested on listed commercial properties but on foreclosed properties.

In Texas, the real estate industry was able to withstand the impact of the market crisis, outperforming other states such as Arizona, California and Florida in both commercial and residential properties.

CB Richard Ellis senior vice president, investment properties, Jennifer Pierson said that many investors are interested on acquiring foreclosed properties in Texas because they believe that the market is more resilient compared to others.

On a positive note, Pierson explains that investors’ interest may help banks weed out bad home loans, re-assessed them, re-evaluate their prices and sell them under prevailing market rates.

Meanwhile, Drew Kile, Marcus and Millichap Real Estate Investment Services’ regional manager for its Fort Worth office, noted an increased of investments from other states in commercial properties in North Texas.

He said that investors from California and Florida are buying foreclosed properties in Texas when real estate markets in their areas bottomed out. Kile advises clients to be on alert for good deals when buying foreclosed properties and not just rely on falling prices.

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