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Commercial defaults and foreclosures are on the rise….Live/work buildings have not escaped the squeeze.

As more and more Santa Rosans embrace the idea of walkable downtown neighborhoods, one would think commercial businesses would be rushing to get on board. This is the idea behind the many live/work buildings that  popped up in the mid 2000’s . It’s a great idea, but getting tenants into the commercial units has become increasingly difficult.

Just as in the residential market, many commercial property owners have found themselves “under-water”….and in most cases, without much simpathy from their lenders. In commercial real estate, the vacancy rate is a huge factor. According to an article in the Santa Rosa Press Democrat, the apartment market is 20 times stronger than the retail market. Due in large part to the many previous home owners who have entered the rental market .  There is, however, some optimism from Santa Rosa builder Hugh Futrell, owner of three live/work projects in the downtown area, who sees the Santa Rosa core as a stronger commercial market then some other areas. 

 While residential real estate financing has tightened its belt, commercial financing has virtually dried up… Just one more turning of the screw for commercial real estate.  Mike and I have seen this first hand with live/work buildings we’ve listed and  sold , as well as commercial buyers we’re currently working with. These days , if you’re looking to buy commercial property…even if it is considered live/work….and, even if you intend to live there…you better have CASH.  And, if you have commercial property to sell, you can see what your up against.

See full article in the Santa Rosa Press Democrat

 

 

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