Friday, November 20, 2009
Example of the Commercial Real Estate Crash: Silverdome Sells for $583K
In an example of the collapsing real estate market, the Detroit Silverdome - which was almost sold last year for $20 million dollars - was just sold for $583K.
Taxpayers paid $55.7 million to build the Silverdome in the 1975, the Pistons played there between 1978 and 1988, and the Lions played there from 1975–2001.
The Daily Finance points out that $583k sounds more like the price for a New York Studio than a giant sports arena.
4 comments:
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Didn't a judge negate this sale the day after this absurdity was "sold" to the most well-connected bidder ?
ReplyDeleteDeflation is coming to an asset near you too. But, folks, consider exactly why deflation is coming on the scene.
ReplyDeleteLast year a west coast real estate investment company that owns two-dozen or so properties in my area (northern Maine) -decided to contract with an auction house for an "absolute" auction of those properties. These were mostly apartment houses and a few single family homes.
What they found in the weeks leading up to the well-advertised auction, was that the bids that were being floated around represented 2-5% of what they paid for these properties just a few years before. Reality hit home.
The "absolute" auction was canceled.
The Silverdome is an excellent example of the growing valueless-ness of all US real estate. So, don't fool yourself about the price. Like all US real estate, it is approaching utter valueless-ness.
The Silverdome was 1) poorly constructed 2) has a politically designed and impossibly expensive maintenance, security and vendor contract over-structure, and, 3) the property-tax alone would choke most small to medium sized non-oil-producing countries were they called upon to pay it year in - year out.
The Silverdome is a fantastic example of a building built and destroyed by empirical design. Too many cooks... No, I mean too many crooks!
Whole communities in the US have been similarly designed, with self-implode written all over the overall scheme of things.
A good many (Florida and elsewhere) condo buildings have been similarly built around the notion that the contractors would get rich not once, but twice, and even perpetually with HOA contracts that essentially made the condos themselves worthless -except to the swindlers who held those contracts.
We have all read in the past, and we can currently read - about whole communities whose debt load has put them underwater.
The -empirical profit notions- of debt and fees have devalued the entire world. You cannot buy anything today, and someone doesn't want to put their hand in your back pocket for the rest of eternity.
That uneasy feeling you get when someone puts a contract in front of you? Trust your first instincts there.
DO NOT SAY NO ONE TOLD YOU THIS.
The devil always has a contract ready.
Successful property investors will do a lot of research on areas that they believe will become property hotspots and areas which are less likely to perform. There are many areas experiencing high levels of growth and financial investment with a lot of regeneration programmes in place or planned in the future. Even by simply monitoring publications such as Construction News can give a good indication of where new commercial premises are being built which can be a good indicator of new businesses moving to the area which it turn can lead to an increase in demand for property locally.
ReplyDeletehttp://theproperty.blogstream.com/v1/pid/423195.html
Wow, that's incredible. I'm thankful that the Boston luxury rentals market hasn't been hit nearly as hard as detroit. The prices of homes there just continue to decline; the median home price is 7,000 dollars. That's quite simply shocking.
ReplyDelete