Monday, February 02, 2009

UK: CRE Values Off 26% in 2008

by Bill McBride on 2/02/2009 12:17:00 PM

From the BBC: Commercial property values plunge (hat tip Adam)

UK commercial property values fell by a record amount in 2008, according to Investment Property Databank (IPD).

Its UK Quarterly Property Index showed commercial properties lost 26.4% of their value last year - the most since records began in 1987.

The values of office buildings, shops and warehouses are now broadly in line with December 2001 levels.
The good news for CRE is prices aren't sticky like for residential real estate. The bad news is this leaves many recent purchases far underwater, and probably means the owners will walk away once any interest reserve runs dry. Just more losses for the banks ...