Commercial Foreclosure Sales and Occupancy Rates Rise in Washington

by on States

The commercial property market of Washington has suffered along with the residential property industry with the advent of foreclosed properties. However, some areas in the state are showing improvements, where commercial foreclosure sales are rising and vacancy rates declining.

Bank foreclosures in Yakima and in other key markets of the state have affected both the residential and commercial markets. In Seattle, for example, several downtown commercial buildings were opened in 2009 when the foreclosure problem was at its peak. These office buildings were started during the real estate boom, but were caught by the industry crisis. According to local reports, the buildings were completed with owners unable to find tenants before the structures broke ground in 2009.

The 10 buildings in the downtown area that were built in 2009 added significant percentages to the vacancy rate of Seattle and aggravated the already worsening Washington foreclosures problem. However, recent developments showed a complete turnaround for these structures, with over 50% of the spaces in these buildings already leased or sold, with tenants including big name companies, such as Isilon Systems, and the Polyclinic.

According to real estate market observers, the commercial foreclosure sales and leases helped relieve some of the negative effects of the recession and the foreclosure crisis. Although most of the spaces were sold or leased for rates that are much lower than the buildings' original asking price, some landlords still prefer it that way than leaving the spaces vacant for an even longer time.

According to some of the landlords, a full building offered at discount prices is better than a completely empty one. For some, the situation is good enough, but others are incurring heavy losses, according to realtors. There are also developers who allow lower rents and approve low purchase prices, so they can avoid seeing the buildings become foreclosure property for sale.

Real estate analysts have argued that, although current commercial foreclosure sales will hardly make for a landlord's market, they still represent an improvement and might even be a sign of better things to come. They added that the fact the market is not oversupplied will also help it recover faster.

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