Look for the media to cycle away from the doom and gloom reports of residential real estate and instead focus more on the doom and gloom of commercial real estate. As our economy continues to bottom or hover near the bottom, depending on who you listen to, we will hear more and more about foreclosures of apartment buildings, retail centers, and office complexes. To be honest this will be much worse than the residential real estate bubble. The debt used to fuel the commercial building craze of the past real estate cycle is about to come due in 2010.

In my opinion, banks will be more susceptible to failure now than during the residential crisis because their loan amounts are much much higher. Were moving into a period where those who have patiently waited to put capital back to work will begin to do so. Or as Lisa Campoli (Executive VP of Colliers, Meredith & Grew) said, “2010 will be… the period in which the logjam broke in commercial real estate”.

In 2010 lenders will have to write down their investments and allow for “market clearing prices”, as Campoli states in her What’s ahead interview with the Boston Globe this past Sunday. Long story short 2010 will be the housekeeping year for 2011. That’s when growth should return.

Filed under: Boston Developments