The New No-Spin Zone?

I've often railed against the mainstream media because of its long-running role as enabler and cheerleader for the conflicted and delusional Wall Street-Washington establishment. Nonetheless, an article in today's New York Times has imbued me with a bit of newfound respect for The Gray Lady.

First off, here's a sampling of what some news organizations have recently said about the commercial real estate market:

"Commercial Real Estate Has Hit Bottom: Gosin" (CNBC)

Real estate developer Barry Gosin said he thinks commercial real estate prices have hit bottom.

"We are calling a bottom," Gosin told CNBC Friday. "Our view is that the rents have priced forward, that values have come down significantly, and that some time this year prices will start to turn."

Gosin is CEO of Newmark Knight Frank, one of the largest real estate management firms in the U.S. His firm owns many properties, including the Flatiron Building, in New York.

According to Gosin, rents have dropped throughout the country, except for Washington, D.C. and that trend has encouraged new demand.

"The guys who run my offices around the country tell me that companies are starting to think about spending money, they are looking, and they are making decisions," Gosin said. However, he cautioned that it doesn't mean it's going to be a robust recovery.

"Commercial Market May Soon Hit Bottom" (Detroit Free Press)

Commercial real estate investors face another bleak year in 2010, but the market appears to be bottoming out nationally and in metro Detroit, a leading real estate firm said in its annual forecast Monday.

"Many have called commercial real estate 'the next shoe to drop,' but that's really an exaggeration," said Bob Bach, senior vice president and chief economist of Grubb & Ellis, which has an office in Southfield. "It implies that commercial real estate could wreak damage on the financial system equivalent to the subprime residential mortgage losses, which is highly unlikely because the value of outstanding commercial mortgages is a fraction of the value of outstanding residential mortgages.

"US Commercial Real Estate Woes Manageable, Morgan Stanley Says" (Dow Jones)

The nation's commercial real estate troubles look like a manageable problem to Morgan Stanley (MS).

A team of six analysts at the firm said Thursday that commercial real estate as a whole is "only a moderate headwind for the economy," and that property values bottomed in mid-2009.

They further predicted that the nation is headed for a "multi-staged" and "gradual" recovery, with values remaining stable this year. The positives, as Morgan Stanley sees them, are building into an attractive distressed-investment environment.

There have been signs of life in the investment-property market recently, including private-equity firm CIM Group and developer Harry Macklowe's move to pay off creditors for the old Drake Hotel site in Midtown Manhattan. Another is Blackstone Group LP's (BX) moved to buy Wachovia Corp. debt in a bid for real-estate investment trust Highland Hospitality Corp.

Compare those reports to the one published in today's Times:

"Further Slide Seen in Commercial Real Estate"

There are 920 football fields of available office space in Manhattan. More than 180 major buildings totaling $12.5 billion in value — from Columbus Tower at 1775 Broadway to the office tower 400 Madison Avenue — are in trouble, meaning in many cases they face foreclosure or bankruptcy, or have had problems making mortgage payments. Rents for commercial office space fell faster over the past two years than in any such period in the last half century.

“I have been in the business for 12 years. I have never seen it this bad,” Peter Von Der Ahe, vice president of investments for the brokerage Marcus & Millichap, said of New York City’s commercial real estate market. According to more veteran colleagues, he said, things have not been so dire since at least the early 1990s.

And that is not the most sobering assessment.

“It hasn’t hit bottom,” Mr. Von Der Ahe added.

He is not alone. More than half a dozen experts on commercial real estate in New York City said that despite some flickering signs of economic recovery here and elsewhere in the country, the universe of big buildings and giant apartment complexes has further to tumble.

Rents, they say, will go lower. Vacancy rates are likely to rise, too. Owners of troubled properties will face a final day of reckoning and in some cases lose their properties.

“We’re projecting the biggest value losses in the nation,” said Aaron Jodka, a senior real estate economist at Property and Portfolio Research, a Boston-based independent real estate research and advisory firm. He predicts that by 2011, the value of New York metropolitan area office buildings will decline by 58 percent from its late 2007 peak. It is already down 40 percent.

Could The New York Times be the new no-spin zone?

Comments

[roger]

NY commercial R E plummet,12.5B worth of commercial
R E in deep trouble.
85000 jobs lost in Dec. worst than expected and on & on & on.

[Matt]

"Many have called commercial real estate 'the next shoe to drop,' but that's really an exaggeration"

That quote is awesome...

[Blurtman]

"I've often railed against the mainstream media because of its long-running role as enabler and cheerleader for the conflicted and delusional Wall Street-Washington establishment."

You left out the role as enablers of the US military industrial complex. Recall the absolute nonsense and criminal propaganda published in the NY Times, as well as in the US MSM. Pravda-like and it continues with "reporting" on the Iraq ans Afghanistan wars. Did you read about the recent execution of the schoolchildren by Western forces in Afghanistan in the MSM? Me neither.

[Dave Narby]

@ Michael

Wouldn't it be interesting if the NYT found religion... In a focus group that shows people will actually pay for actual NEWS, not leftist propaganda?

[tpn]

re: NYT; broken, clock, twice, etc.

[alex west]

no.. they just spined roles this week,, :)
Times is bearish.. rest of is bullish...
wait for next week...

alex