Law Office of Henry B. LaTorraca Civil Trial Attorney

Commercial real estate bubble fears may be unfounded

Prices of commercial property in several key California markets reached levels during the second quarter of 2015 not seen since the 2008 financial crisis, but some experts say that fears of another real estate bubble are unfounded. Don Peebles, the CEO and chairman of a prominent real estate concern, says that much of the recent surge in property values has been fueled by apartment buildings and multi-family townhouse projects, and the office space market in many key cities remains sluggish.

According to Peebles, gridlock commuter traffic in the Los Angeles metro area has led to a surge in demand for affordable housing closer to the places that people work. He also points out that the costs of undertaking large commercial real estate projects in major American cities sometimes puts off investors and developers. The entrepreneur also pointed out that rising prices in cities like New York and San Francisco could be squeezing out middle class families.

Some fears about an impending commercial property bubble was sparked by a wave of luxury apartment building construction in cities like Miami. Peebles conceded that these markets had cooled considerably in recent months, but he says that this has been partly due to the falling value of foreign currencies like the Euro and ruble.

Investing in commercial real estate successfully involves careful planning and timely action, but even the most attractive projects can be disrupted by legal disputes. Zoning issues or regulatory problems can put developments on hold for weeks or months at a time, and disputes between the various parties involved could lead to ruinous litigation. Attorneys with experience in this area may be able to help property buyers, sellers, investors and developers to anticipate and avoid such issues by taking a proactive approach. When disputes do arise, attorneys may urge the parties involved to reach an amicable resolution to avoid the costs of a protracted court battle.

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