COMMERCIAL REAL ESTATE FORECLOSURES – 4/12/10………………

Commercial foreclosures on the upswing – Have you noticed any media reports about the increase in the number of commercial foreclosures lately? I’ve seen a definite upswing in the number of commercial foreclosure activity since the beginning of the 2010 year. We’ve been told now for months that the commercial market ‘correction’ is coming, and based on the weekly reports I’ve received from escrow companies and foreclosure notices from the county tax records, the velocity of foreclosure activity is up. First the foreclosure notices were primarily vacant land and a few smaller multi-family structures; now I am seeing more retail/shopping center foreclosures and more office and industrial as well. Apartments listed for sale on various websites have dropped dramatically in the past 12 months; a property that was listed for maybe $40,000 per unit is now listed at less than $20,000 per unit in many instances. As expected many of the properties are in poor shape with higher vacancies and deferred maintenance; but there is always a ‘diamond in the rough’, meaning something priced below market, but in better cosmetic condition and with good curb appeal. Often times the property is only suffering from mis-management of the property, which provides a great opportunity for a savvy investor to provide a simple ‘value-add’ improvement and significantly raise the property’s value. We’ll talk later about simple things you can do as an investor to add value to your investment………………………..