Commercial Real Estate Might Not Go Bust

Commercial Real Estate Might Not Go Bust

In spite of all the recent gloomy talk, the U.S. commercial real estate market might not endure the belly flop everyone seems to be anticipating. More real estate investment trusts (REITs) have been warming to the concept of deleveraging in recent months, raising approximately $12 billion of equity in the stock market to either fortify their cash positions for the months and years to come or simply to pay off debt.

Analysts expect that the ability of high-profile real estate owners like Brandywine Realty Trust, Highwoods Properties Inc., Forest City Enterprises, and others to raise capital in such a difficult lending environment will help the overall stability of the commercial real estate market, as fewer buildings will have to be sold at bargain-basement prices.

Source: Richmond Times-Dispatch, Andrew Little (06/08/09)