Object Name: New center overbuilding
Geroldswil, construction site east
Keywords: housing, glut, financial crisis, overbuilding
, household formations
NIC studies have disclosed a 35% reduction in the number of seniors housing investors overall, and Kramer hypothesized that most of those leaving were relative neophytes who got burned by assisted living overbuilding
after the high-flying mid-1990s.
How quickly and vigorously this occurs is uncertain, but without question the boom/bust cycle sparked by the overbuilding
of the mid-1990's is nearing its end.
It is too easy to dismiss the current and dramatic downturn in the industry as a combination of overbuilding
, flattened growth, license fees, badly managed debt, and inflated valuations.
In that scenario, overbuilding
weighed the market down with too much supply according to the conference speakers.
The FDIC warned in its report that Denver, along with 12 other cities, is vulnerable to overbuilding
commercial real estate space, in part because of its exposure to high-tech companies.
REAL ESTATE RESEARCH CORPORATION (RERC), Chicago, has launched its Web site, www.rerc.com, with "Metro e-Trends" as its focal point--where users can instantly access in-depth investment criteria (yields, capitalization rates, overbuilding
risk, value and rent growth), noteworthy leasing and transaction activities, market statistics, economic and demographic trends, and market updates for 14 of the nation's top metropolitan markets.
The risk of overbuilding
, now at 5.8 on a 10-point scale (with 10 equaling high risk), is lower than most other property types.
Despite rumblings about overbuilding
in some markets, 1998 was a good year for multifamily builders.
It said, although the near term prospect for the building and construction industry in most of these countries is bleak following the fallout of the region's economies, compounded by overbuilding
in the mid-1990s, the longer term outlook is sound.
According to some industry analysts, the plunge in freight car production in the early '80s is attributed to the overbuilding
of cars in the late 1970s.