$150 oil can bring down the empire of US commercial real estate deepening the financial meltdown and depressing the economy
Walter Pyka
Jul. 4, 2008

The $4.25 gas price is affecting many Americans like never before. The emergence of Internet as a marvelous business tool, the advancement in telecommunication and the traffic jams has made it necessary for the folks to telecommute. Small businesses that do not need formal office spaces are ready to move back into homes. The storefronts are lacking customers as expendable income become scarce with gas prices. People are cooking at home instead of going out to restaurants there times a week.

People tend to see TV, a movie at home downloading the same from the Internet, and work on their business from their den or the basement instead of logging in 30 miles to beat the traffic.

The mall are getting empty as the Government give out checks (increasing the budget deficit without a dent on the economy) are spent for paying off credit card bills that accumulated from the %4 gas price.

What does this all mean for US commercial real estate? Yes, you got it right – simply put depression with rent falling apart all across the country.

Commercial real estate will plummet and never come back. New eco friendly cities will be built where work from home becomes part and parcel of the life. Universities will start offering more online courses where possible.

The net effect on the economy is devastating. The collapse in commercial real estate will be a catastrophe. $150 oil can bring down the empire of US commercial real estate deepening the financial meltdown and depressing the economy.

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Walter Pyka
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