A prior CaliforniaCommons noted that according to Northern Trust Chief Economist Paul Kasriel the nationwide commercial real estate market remains overbuilt and is expected to lag recovery in other sectors of our economy. This view was confirmed in a recent The Atlantic article by Megan McArdle entitled ‘Capitalist Fools‘ which explains why “the nation’s stock of commercial real estate is suddenly less valuable than it used to be.”
Closer to home, Jeff Quackenbush of the North Bay Business Journal reported that as 2009 concluded, absorption of commercial space in Napa, Sonoma and Marin counties was expected to be negative for the year. For 2010, the outlook of those interviewed was described as “hopeful” yet the underlying realty reality indicates that even without additional construction, local commercial space, especially retail, will continue to have high vacancy rates well into the future.
As well-stated by Ms. McArdle – “The best explanation for the calamity that has overtaken us may simply be that cheap money makes us all stupid.”
