It’s a well-known fact that the subprime mortgage meltdown is slowly spreading its tentacles farther afield in the financial realm. Witness the Abu Dhabi injection of 7.5 billion into Citigroup Bank yesterday. Plus, the acquisition of E-Trade mortgage assets at 25 cents on the dollar by Citadel Group.
I prefaced with that because the next thing to start splitting apart is the commercial real estate market. According to Bloomberg, "In the bond market, commercial property investors are about as creditworthy as U.S. homeowners with subprime mortgages. "Commercial real estate is a full-blown bubble that feels very much at a bursting point,” said Christian Stracke, an analyst in London at CreditSights Inc., a fixed-income research firm. "There’s a fairly toxic mix of factors at work.” "
Now, this analysis is not directly pointed at Dallas or Lake Highlands. But, just as a rising tide floats all boats, a tidal wave can wash all ashore. Looking at Back Talk posts by Jeff here and here the past year, it certainly gives one pause to think about what is going to happen in this area heading in to 2008. We have the Casa Linda redevelopment, the LHTC groundbreaking, the redevelopment across from Presbyterian Hospital, the new mixed-use development at Walnut Hill and Central, and the big Park Lane Place effort. All of these are in various stage of development and all depend on returns on investment. All depend on homeowners buying into them and retailers leasing into them. After reading that Bloomberg piece, I’m glad my money is in oil and gas.
