According to a recent Bloomberg article, the renowned investor George Soros feels that commercial real estate has an additional 30% decline left in its pricing.  If he is correct, that would mean an upcoming strain on the US banking system on an unbelievable scale.  Commercial prices have already fallen +/- 30% from their 2007 highs.  An additional 30% would be devastating.  Soros also commented on the current Administrations monetary policy, fearing that we are setting ourselves up for a period of significant inflation.

It all puts the real estate investor in a tough predicament.  The impending inflation would drive you towards buying now and locking in your capital costs.  However, with the specter of additional pricing declines on the horizon, investors are reluctant to buy now for fear of overpaying.  So, again, the real estate market remains locked in indecision. 

Here in Richmond, the situation is very similar.  Richmond BizSense ran an article this week talking about the lack of sales activity in this market.  In addition to quoting some fantastic market experts (including your truly), the article does a very good job of laying out the situation that faces both buyers and sellers in today’s market.  No doubt, it’s a tough one.  The companies that can be flexible and creative will do much better than those that can’t.

On Wednesday afternoon, the MSC Catania gracefully slid up to its berth at Jacksonville’s Blount Island Terminal.  The 983-foot, 4,900 TEU vessel represents the largest ship to ever call upon the port.  The large vessel did have to come in “light” due to the restrictive depth of the channel.  She will also not be part of a regular rotation at the port, as she was filling in for another vessel that ran aground.  Jacksonville hopes to be able to allocate a portion of the Stimulus funds to further deepen the channel to 40-feet.  The arrival of such a large ship is a momentous day for Jacksonville as they work towards becoming a major est coast player.

“You’re getting a snapshot of what Jacksonville can be,” said Rick Ferrin, the Jacksonville Port Authority’s executive director.

As large as the MSC Catania is, she is still medium size by today’s standards.  The MSC Catania is 300 meters long and 37.8 meters wide, drawing 14 meters.  As a comparison, the Emma Maersk, one of the largest container vessels in the world, is 397 meters long and 56 meters wide and draws 15.5 meters.  Even today, larger ships are being built.  Even with the additional dredging, Jacksonville has a long way to go before the Emma Maersk graces their terminals.