Friday, August 22, 2008

Bend is different, again.

It seems like commercial development in Bend (and Central Oregon as a whole) hasn't slowed a jot.

Not one iota.



When I peruse the Source and there are new stores I've never heard of, new restaurants opening everywhere. New shopping malls, new department stores soon to open (Gottshalks and Kohls) , new hotels.

It's just weird I tell ya.

Over the last few days, I kept having customers come in with a shopping bag i'd never seen. Turns out, it's a new store on Wall Street. Must be selling the hell out of things, based on the number of bags.

At the same time, I counted 7 large ads in the Source of 7 long term stores selling off inventory anywhere from 40 to 80% off: and these aren't the stores going out of business, as far as I can tell. I'm sorry, but my reaction is always the same -- if you are selling everything in your store from 40 to 80% off and you're NOT going out of business, you were overpriced in the first place!

Very strange, especially if you've been paying attention to the national trends. The Bulletin has a small article in the corner of the business page: "Commercial property, bankers fear, may be the 'next shoe to drop.'"

I've been paying a lot of attention to this -- as I always say, it just isn't a very interesting subject to most people. Housing declines, everyone can relate to that. Commercial building? Shrug.

Whenever the CRE market subject comes up on the Housing Bubble Blog, or Calculated Risk, the comments drop in half, and usually stray over the housing after a couple of back and forths.

In the NYT's News Service article, it says "For Wall Street banks, which hold about $100 billion of commercial mortgage-backed securities, the prospect has fanned new worries that a deterioration of the overall commercial property market could trigger more write-downs in the coming quarter, on top of losses already expected from their distressed mortgage securities holdings."

A little bit of a cast off statement; from what I've read, the commercial mortgage loans for next year have dropped roughly 80% or more.

There's a time lag here. For instance, another measure, architect billings, precedes that market by about 8 to 12 months, and those pretty much fell off the cliff earlier this year, which means to effect would hit............................... right about now.

So there it is: national news that building has all but stopped. Even the big boys are pulling back. Anything that hasn't already been excavated, probably won't be built.

So just like the Housing Boom in Bend, a year or two ago, either I have to believe that Bend is different......

Or most of these projects won't be built.

And we know how the Housing Boom went; turns out we weren't so different after all.

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