Saturday, November 28, 2009
Paying Attention To Dubai Market
By, Meredith Anderson
With the US market already unstable, the recent news of Dubai's state-owned investment arm-Dubai World and its reconstruction of debt has come to every ones attention. It shocked many how a city so far away could have such as substantial impact on the United States real estate. Dubai faces $59 billion dollars that it has no way of paying back.
Since the news was realized on Friday The Dow Jones U.S. Real Estate Index decreased by 2.9%. That is nearly twice the decline of broader U.S. market indexes. "Dubai may have to unload some very prestigious properties at distressed prices and this will drive the price of all commercial real estate lower," wrote Richard Bove, a banking analyst at Rochdale Securities in Lutz, Florida. Dubai World is an investment company that manages projects and business for the Dubai government. Dubai World is involved with many large real estate projects in the United States including CityCenter in Las Vegas and other Miami and New York resorts and hotels. "This downturn has had more of a global impact," said Tony Ciochetti, chairman of Massachusetts Institute of Technology's Center for Real Estate in Cambridge, Massachusetts."As I try to explain to my students, with a global economy, we're all attached at the hip financially in some way, shape or form," he added.