The Global Financial Crisis and Real Estate (part 6)

The Global Financial Crisis and Real Estate (part 6)
Now we will discuss the office sector. I confess to having less knowledge and less interest in this sector than any other. Traditionally the office sector leads downturns and lags in recoveries. This downturn has been exceptional in that the office sector has been almost the last to feel the effects. The effects are being felt now as expansion plans are cancelled or put on hold. Financial sector companies are going under or merging. Even manufacturing and other service industries are cutting back on office workers. When the beehive prepares for winter they drive out the drones. This is happening in the business beehives now.
I see some hope in the possibility of a new industry. The governments are announcing investment and guarantees in huge proportions. I see a whole new group or consultants coming in to the mix to teach companies how to get this money and to teach executives how to steal it. Who knows how much office space these people will need. They may just work out of luxury beach houses in offshore banking havens.
Whatever happens, many of the 1st tier cities are finding themselves with considerable oversupply of class A office space. By the time the recession turn around much of this property will have been foreclosed or sold cheaply.

David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com