Law Office of Henry B. LaTorraca Civil Trial Attorney

Commercial property market slowing down

California commercial property brokers may have seen the recent report that indicates that the commercial property market's profits are now slowing across the nation. According to Bloomberg, the loss in profits may lead some owners to lease instead of selling the buildings they own.

Bloomberg reports that the slowdown is a normal part of the commercial real estate cycle. The market had been rapidly heating up since 2011. This decrease in profits for some major companies is reportedly indicative of a more mature stage of the real estate cycle.

Large commercial real estate property brokers have experienced significant decreases in profits this year as compared to their profits in 2011. CBRE Group Inc. lost 14 percent, while LaSalle lost 16 percent. Marcus & Millichap Inc. experienced a 17 percent drop in August, while HFF Inc. experienced a loss of 20 percent. Reportedly, the expansion of commercial real estate lending has also slowed. Experts believe that several factors are working together to cause the market to slow. These factors include a stronger U.S. dollar impacting investment by foreign companies, a drop in gas and energy costs and a corresponding drop in commercial real estate needs in such oil and gas centers as Houston.

Owners that are trying to decide whether to sell their commercial real estate or to instead lease the buildings out may want to seek the advice of an attorney. Markets vary by state and city in the commercial real estate marketplace. An attorney may be better equipped to analyze the status of the client's specific market in order to provide an informed recommendation, and the attorney can then prepare the applicable documentation.

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