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Wednesday, January 29, 2014

Should The Fed Stop The Dominoes From Falling?

The forest (the economy) can only remain vibrant and healthy if the dead wood is burned off in bankruptcy and insolvency. Retail commercial real estate is over-built and over-leveraged. If it is allowed to burn off as Nature intended, we can finally move forward.

Last week I suggested that Retail-CRE (Commercial Real Estate) would be The First Domino to Fall in the domestic U.S. economy. The reason is simple supply and demand: for a variety of structural reasons, there is an enormous oversupply of retail commercial space and an ever-declining demand for bricks-n-mortar commercial space.

I laid all this out in a three-part series last week:

Dead Mall Syndrome: The Self-Reinforcing Death Spiral of Retail (January 22, 2014)
The First Domino to Fall: Retail-CRE (Commercial Real Estate) (January 21, 2014)

After Seven Lean Years, Part 2: US Commercial Real Estate: The Present Position and Future Prospects (January 20, 2014)

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2 comments:

Anonymous said...

I remember 1978 shopping centers boarded up everywhere and a friend bought one for 80,000 sold it in 2005 for 5 million would like to see some deals like that again.

Anonymous said...

If the feds can help other businesses they can help Dominoes - love that pizza.