Hey, it’s the intern again. This particular story is of great interest to me. My family has been involved in commercial real-estate since they came to America in the early 1900’s. I have grown up in an environment that has seen enormous growth in not only commercial real estate but residential as well. Since last year, the housing market has seen a rapid decline in home values in various regions across the country. There has been ongoing controversy about the state of the commercial market, and worries about it falling victim to the same problem as residential.

An article in the Wall Street Journal yesterday morning caught my eye. It discussed issues with office and retail space in Phoenix, Arizona. It described how the commercial real estate market there has suffered as a result of the plunge in home values. When viewing old videos of interviews from February 2008, experts seemed to think that the commercial market would stay immune to the problems that were going on in the residential sector. They cited that overbuilding was not an issue and that the loans made to commercial investors were much safer then the sub-prime loans that caused the housing disaster. I wonder how much of this still holds true, and if this is the beginning of a pattern. Will commercial real estate follow the lead of the residential market in the country’s most distressed areas?