| There is little doubt that most people and businesses | | | | brokers to, well, anyone associated with the industry is |
| are glad to see 2009 pass, but what does 2010 hold in | | | | going to be in big pain. 2009 started the commercial |
| store particularly when it comes to bankruptcy filings? | | | | real estate market implosion, but 2010 will see the |
| Let's take a look. | | | | biggest bloodletting. |
| The 2009 calendar year saw the bankruptcy filings of | | | | The third development will be the continued |
| companies that were once thought impervious to such | | | | “hidden” second great depression. People say |
| a development. Two that immediately come to mind | | | | we were saved from a great depression, but this |
| are Chrysler and General Motors. Both filings were | | | | isn’t true. The key is the banks. More banks failed in |
| fairly quick because the nature of the reorganizations | | | | 2009 than 2007 and 2008 combined. The government |
| were figured out before the filings were made. This | | | | is just doing a good job of keeping the news under |
| presents us with our first trend in 2010. | | | | wrap. Ah, and what about unemployment? Well, the |
| We can expect to see more pre-packaged | | | | reported rate is just over 10 percent. In truth, it is closer |
| bankruptcy filings this year by large businesses. This | | | | to 20 percent. The official rate does not include people |
| type of bankruptcy has always been around, but it | | | | who are working part time or haven’t had a job in |
| was turned into an art form in 2009. The basic idea is | | | | a year. All of this will lead to more personal and |
| to put the screws to the creditors while threatening a | | | | business bankruptcy filings. |
| bankruptcy filing. Those creditors that don’t agree | | | | Is there any economic hope in 2010? Yes. The good |
| to the deal being offered are then washed away in | | | | news is we’ve stabilized from a confidence stand |
| bankruptcy while those that agree come out the other | | | | point. That is important because it means people will go |
| side with some interest still in the company, often an | | | | out and spend at least a bit on things. I just bought an |
| equity interest. | | | | exercise bike! Regardless, the panic of 2009 has |
| The second trend we will see in 2010 is the | | | | ended and one can expect a bit of stability in 2010. Will |
| continuation of huge bankruptcy filings. The difference | | | | there be a recovery? Technically, we are already in |
| is you and I will not recognize many of the names. | | | | one, but the effects won’t be felt by people like |
| These companies will be behind the seen entities. The | | | | you and I until the end of 2010 or early 2011. Still, that is |
| number on industry where this will occur is in | | | | better than where we were in January 2009. |
| commercial real estate. Everyone from mall owners to | | | | |