My Call

Shorting commercial property indexes over the next six months seems like a no brainer right now. There is no question that businesses are going to tighten their staffing levels over the next two quarters as they reflect a shift to different areas of profit from the previous 12 months. Because of this it seems self evident that their reduced foot prints would create significantly broad increases in vacancy rates. I would be tempted to say that risks associated with credit shortages and defaults would already be built into the system. But, as the above chart shows, commercial real estate as a whole returned 2.5% last quarter. Indeed commercial index IYR is trading almost 33% off its lower at the end of last year.

I just don't see why this index won't see a correction along the magnitude of the residential market. I am locking in a price 35.83 and we'll see where we stand in 60 days, and 90 days.