Can there be any relief in the condition of the commercial real estate market? Though some initial trends have made some financial pundits perceive a small ray of hope, other refuse to admit any such initiation so soon. Are they disconsolate? Well, they are certainly dejected to a certain extent and moreover, they consider that any respite is not so easy given the extent of the downturn. One of them is the celebrated investor George Soros.
On the word of Soros any such early relief is next to impossible and on the contrary, a significant drop in the commercial real estate market is becoming highly evident. What are his exact views therefore? It has been learnt that Soros (in the recent days) corroborated before a forum in Washington personal views and stated also that commercial real estate “has not yet fallen in value.” On the other hand, as indicated by the investor, a number of transactions suggest that some properties “will drop at least 30 percent.”
Now the question remains what has been the basis to make him state in this manner. Has there been any major development recently? An imperative report published in the recent days states that commercial real estate values have already fallen 30 percent since 2007. Reason? The only reason is the same credit crunch and that has led to a slowdown in many such transactions.
What should have been the ideal role of the US government? As per the views of the investor, President Obama should have moved to recapitalize banks “the right way” by creating “new banks on top of these old banks.”
It is to be noted that George Soros, in a discussion with the Wall Street Journal op-ed piece, gave emphasis to the need of a tight regulation of credit default swaps, which as maintained by him happens to be the basis of the credit crisis. He called them “toxic instruments” that should only be owned by people who hold the underlying bonds.
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