While most Americans are busy keeping an eye on the record number of residential home foreclosures, commercial foreclosures are not far behind. Commercial foreclosures happen when a business can no longer afford to pay for their commercial mortgages. Just as homeowners have been affected by the economic recession, many businesses have also taken a huge hit. With retail sales down nearly forty percent and everyone tightening their belts, businesses can no longer afford keep up. Many large corporate chains like Star Bucks, Pier One Imports and Circuit City have been forced to close hundreds of stores.

Commercial real estate also includes apartment building, and with occupancy rates in many cities at record lows, which in turn necessitates lower rents, many apartment building owners can no longer afford to pay their mortgages. This has forced thousands of owners into default. When a business or apartment building defaults on their mortgages, the bank or lender has no other option but to repossess the property and try to sell it on the open market.

Opportunity Knocks

When a business closes shop it is always a very sad day. Not only do the owners lo
se their dream, but their staff must also search for new jobs. If the business was a large one, it can even affect an entire community. But if we look we can still find a silver lining. For when one business fails, it gives another the opportunity to succeed.

Due to the current economic crisis, many dreamers have been given the chance to start their own businesses at a fraction of the prior price. Since commercial lenders lost so much money on the initial loan to the company that defaulted and they are desperate to make up the difference, they will often sell the property at a deep discount.

A Great Investment

Whether you decide to open your own business or to rent out the space out to another business, buying commercial real estate at this point in time is a great investment. In fact, many businesses who are expanding have taken advantage of this unique opportunity to buy a new location rather than lease.

Renting out the space to another business is also an attractive option. Since most commercial foreclosures offer competitive payment plans with low interest rates, you could end up making a healthy return on your investment. Renting the space also gives you another consistent source of income, which will likely increase.