According to an article in the Dallas Morning News, office leasing in the Dallas-Fort Worth area has declined by almost 800,000 square feet in the first quarter of 2009. It’s the first large drop in commercial real estate leasing Dallas-Fort Worth has experienced in six years. Many companies are facing slowing sales and the prospect of closing some locations to avoid bankruptcy, making them reticent to sign on to new leases.
The prospect of massive commercial real estate foreclosures and bankruptcy is a constant fear in most of the industry. This fear of foreclosure and bankruptcy is forcing many commercial real estate companies to offer sizable concessions to potential renters, making it more difficult for commercial real estate companies to remain in the black.
As 2009 progresses the signals coming from commercial real estate will indicate whether we will experience a foreclosure crisis in the commercial real estate sector this year. A commercial real estate foreclosure crisis could send many financial institutions who are barely surviving over the edge to bankruptcy which would spell more job losses and even tighter credit access for consumers.