where would be the good place to look for distressed commercial properties?
Many buyers have re-entered the market to snatch killer deals out there and I myself would like to look into it.

If anyone have any suggestions, please let me know.
thanks!

You have to define "killer deals". Have prices gone lower? YES

Are they at the levels of the 1990's S and L crises? NOT EVEN CLOSE

With this presidency I don't see values getting that low. When working with buyers and searching for deals you need to categorize buyers by asset class. Generally these hedge funds,reits,capital companies have all cash waiting for a deal.

If the buyers want 50 cents on the dollar and distressed values are at 70 percent it isn't going to happen. They either have to take less of a profit margin or wait and see if their bid/ask ratio gets better to meet their acquisition goals. With any cash buyer I would demand a proof of funds valid within the last 30 days to have at least the amount of funds for their target price range. Have a meeting with them to talk about goals and exit strategies upon purchase.


Loopnet has a distressed asset section and in Costar you just have to dig.

Words like owner will consider all offers,owner motivated,estate sale.corporate owner no longer wants to landlord,foreclosure,owner headed to bankruptcy,business is down and owner no longer wants the headache.

There are a bunch of reasons you just have to look. Buyers are more cut throat in commercial and only want the deal. This is why I like the listing side as I control the deal. This is also why I drive around and I will look for pieces of raw land on corners or hot property I know I can sell even in this market.

I will send them a letter and keep it up with my monthly newsletter.

There is billions of dollars sitting on the sidelines and nobody wants to buy until the absolute bottom.Problem is nobody will know when that is so they will make an educated guess.

Thanks for responding, super realtor. You are right about one thing. that is all the buyers i've dealt with are waiting for the price to bottomed out but not sure when that would happen. they are just hoping that price will go down enough for them to feel comfortable to make a move on it.

Quick quesion though, many of the properties bought from 2005 to 2007 were over leveraged and they are maturing in 2010. I exect, the way the commercial market is going,the continuous drop in price. Many banks play this thing called pretend & extend where as long as there's cash flow coming in from the property,they'll extend the time enough for govt to do something. In my opinion, i doubt that govt is going go bail out commercial sector just like they did to residential.

So, Super realtor, can you tell me why the commercial property value is not going to drop as much as many of us have expected them to?

thanks!

There is a saying "pigs get fat and hogs get slaughtered"

Those waiting for the absolute bottom won't know it's the bottom until the market starts going up again. You want to buy on the downcycle not the upcycle.

The reason is the government is letting banks keep debt that is not paying 100 percent of the time and performing on the good debt side. The bank then does not have to report as bad debt and they can paint a rosier picture for their books.

Eventually they will do something with the debt and buyers just have to choose when to jump. Buying anything in this cycle will have hug returns later on as it will be awhile after these next few years before the commercial deals will be this good again.

Right now is a great time for doing commercial real estate deals. I'm looking at two right now. Early 2010 will present a lot of opportunity.