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http://www.myfoxtampabay.com/dpp/news/local/hillsborough/georgetown_plans_real_estate_market_072209
TAMPA - In the inner sanctum of South Tampa sits what must be the eyesore of every passerby.

It certainly is for Marie Lou Pas. She lives right across the street from the foreclosed Georgetown Apartments on south Westshore Boulevard.

"I try not to look that way," she said laughing.

The hope years before was a condo complex, high over the waterfront, a plan now as busted as the windows in more than half of the units. Since then, it's just been sitting there waiting to be something better.

"It would be nice if there could be a park," Pas said. "Right by the bayside and just keep 640 units, like the city was talking about."

There's a contract on it now, but industry insiders say it will be another five years before a shovel hits the dirt.

Pas prays that it never becomes home to the 1700 units for which it's zoned.

Commercial real estate investor Ben Mallah says Georgetown is a perfect example of what he says so-called "condo vultures" have done to real estate.

"Assets are being turned back to the banks and discounted tremendously," Mallah told FOX 13. "It's brought the entire value down for the entire market."

The picture is the same for commercial properties across the board.

"It's definitely the bottom," Mallah said. "I believe we're pretty close to a bottom right now."

He could be right. According to local real estate expert Deborah Farmer, it takes commercial real estate longer to hit rock bottom than residential, by about 18 months.

"People will give up their homes before they give up business," Farmer said. "There are even stories now of people living in their businesses."

In the next year, about $1 trillion of toxic commercial debt is going to be washed through the system.

John Lum with the List Group, a local commercial developer, gives a snapshot of life on the commercial side.

"Starbucks has stopped doing anything in the Bay Area, in Florida, countrywide. That was the darling of any retailer, to put an end cap Starbucks somewhere, he said. "They were paying big big dollars. The CVSs, the Walgreens of the world, they're all putting their plans on hold 'til 2011, 2012."

An 18-month lag time puts them hitting the bottom about now. We can expect about a year, maybe more for it to recover, Farmer said.

Again, less than it took for residential. John Lum says it will take time to fix this problem and a resurgence of consumer confidence—for some local business owners to see this commercial plunge as the time to take the plunge and buy into a piece of real estate for their own.
 

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I know this article is already old news, but its a grim warning for any newer condo project.

Next collapse may be worse

By SHANNON BEHNKEN

[email protected]

Published: July 22, 2009

TAMPA - The weakening commercial real estate market is braced for a bust that experts say could cause even more damage to the local economy than the housing meltdown.

"Any projects built in the last five years, especially those built near new residential developments, are at risk," said Shari Olefson, a Tampa real estate lawyer with Fowler, White and Boggs. "I'm hearing from a lot of owners who just want to walk away, just as homeowners are turning over the keys."

Florida cities already are among the nation's hardest-hit by home foreclosures. Similar problems in the commercial real estate market would cause the recovery of the economy to take even longer. That's worrisome because estimates call for the commercial real estate market, valued at about $6.7 trillion nationally, to see half of its loans due during the next three years.

At the same time, U.S. banks have been charging off soured commercial mortgages at the fastest pace in nearly 20 years, according to a recent analysis by The Wall Street Journal. At the current pace, losses on loans to finance offices, shopping malls, hotels, apartments and other commercial property could reach about $30 billion by the end of 2009.

All of this is a recipe for disaster for local and regional banks, which funded the majority of commercial projects. Compounding the problem is falling real estate values and tenants who don't pay their rent.

"We got overheated," said Scott Clendening, president of the Florida Gulf Coast Commercial Association of Realtors. "We don't have 1,000 people a day moving in to Florida anymore, so retail is going to suffer."

Industry leaders have estimated that as many as 200,000 businesses and 10 percent of the nation's shopping malls will shut their doors during the next year.

Even landlords able to make ends meet may soon run into trouble, said Christopher Jones, who owns shopping centers, office buildings and apartments in the Tampa Bay area.

The loan on his Largo shopping plaza, for example, is up for renewal next year. He has never missed a payment, but still fears he could lose the property in foreclosure. That's because lease rates have dropped from $16 a square-foot to $11 a square-foot, and the vacancy rate has increased. The value of the property likely will be less than what he paid for it a year and a half ago, he said.

"So why would my bank, or any other bank, renew the loan?" Jones said. "They may renew it only if I bring a half a million dollars or more to the table. If I can't do that, though, I'm in a mess, and they're in a mess."

Part of the problem, Olefson said, is that credit is tight and lenders either will be unwilling to refinance commercial projects, or the projects won't qualify because owners owe more than the loan is worth.

In some cases, lenders are requiring the loan be paid early. Some commercial loans include clauses that give lenders the right to call the loan in early if the vacancy rate rises to a set percentage.

Lease agreements also can give landlords headaches. Some tenants have clauses in their contracts that would give them reduced or free rent if the vacancy rate rises or if the mix of tenants changes.

"Some companies have staffs that tour the country and keep track of this," Olefson said.

Clendening said he hopes that lenders will be more flexible and work out new loan terms with tenants.

"The banks have gotten their butts kicked on residential loans, and they don't want to put commercial loans on their books, too," he said.

http://www2.tbo.com/content/2009/jul/22/na-next-collapse-may-be-worse/news-metro/
 

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This is going to hit like a load of bricks as commercial loans typically are only for like 5 years max. So it'll all hit in one huge hit. Fortunately I'm in an upper middle-class, well established area, so most of the new retail around here is well supported. But there are many new mixed use projects that will just be abandoned around town because they were built in transitioning neighborhoods. The residential units haven't sold, so the retail below sits empty waiting for the residential to fill up. In Tampa I think Channelside is going to get the worst of it. In DT, at least you have thousands of office workers during the day to shop and eat. So Skypoint and Element ought to be able to fill up their commercial space. Channelside is going to be in the weeds for quite awhile I fear.
 

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This is going to hit like a load of bricks as commercial loans typically are only for like 5 years max. So it'll all hit in one huge hit. Fortunately I'm in an upper middle-class, well established area, so most of the new retail around here is well supported. But there are many new mixed use projects that will just be abandoned around town because they were built in transitioning neighborhoods. The residential units haven't sold, so the retail below sits empty waiting for the residential to fill up. In Tampa I think Channelside is going to get the worst of it. In DT, at least you have thousands of office workers during the day to shop and eat. So Skypoint and Element ought to be able to fill up their commercial space. Channelside is going to be in the weeds for quite awhile I fear.
I was out the other day in a part of town I don't normally go to and it was amazing to see a commercial strip mall that was built 6 months ago was still completely empty. It's going to be interesting.
 

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Did I read the article right? There was a new condo complex built, nobody bought it, and now it just sits in disrepair????
 

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No it was an old apartment complex (two story wood frame with brick cladding), very large with lots of buildings (quite a complex actually, probably over 600 units). The never got moving on it, so its just the old buildings falling into disrepair. Quite a big eyesore and a big potential health hazard as I'm sure the place is swarming with rats and such.
 
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