The fall of Dubai World! Commercial real estate is NEXT!

This is not good, Dubai crashing and burning. All investors pulled out. Royal family is now default on it's debts.

This will in my opinion spark the systemic collapse of all commercial real estate. It will resemble the same proses we went through with the real estate bubble. First price will drop for commercial real estate as companies default on leases. then the market will be in turmoil. Then the government will bail everyone out.....Oh crap, The government no longer has money to bail anyone out.....

The state-controlled company will ask creditors for a “standstill” agreement as it negotiates to extend maturities, including $3.52 billion of Islamic bonds due Dec. 14 from its property unit Nakheel PJSC, Dubai’s Department of Finance said in an e-mailed statement. Moody’s Investors Service and Standard & Poor’s cut the ratings on several state companies, saying they may consider the plan a default.

“There is no clarity about what exactly is happening,” said Emad Mostaque, a London-based Middle East equity-fund manager for Pictet Asset Management Ltd., which oversees more than $100 billion globally. “They have to clarify if there is going to be a voluntary rollover or if there is going to be a forced rollover. If there is a forced rollover it will mean technical default. If they don’t clear this up then the whole market will want to sell.”

Dubai World Seeks to Delay Debt Payments as Default Risk Soars

Dubai Debt Leads Bloomberg Week in Review

Now would be a good time to store up on a little extra rice and water. At least a few months worth.

This is serious folks. Commercial real estate is going to Fall!

[edit on 28-11-2009 by Izarith]

Thank you, I have been waiting for someone to post on this. I was told by a friend earlier in the day but could not find anything about it.

Edit to say that this needs a lot more attention than it is getting.

[edit on 28-11-2009 by calstorm]

reply to post by calstorm


Yeah my dad told me about it today.

I'm sure the 1.5% drop on the DOW was directly a reaction to this news. It fell much lower than 1.5% but recovered due to the excitement of the market steadily going up these passed few months but I think that if this Dubai becoming default situation is not cleared we will all be in for a wild ride in the Stock market.

But who knows, like you said, this News is definitely not being covered as it should.

Yes, id really like to see where this story go's. I read in one of yesterdays papers that the impact that Dubai had when it asked for a extension on its loan payments, was similar to the collapse in stock when the Leyman Brothers went under. Im sure the figure that Dubai owes is about 36 billion.

I always wonder about that Palm Tree Island and Global warming and rising tides... Maybe the financal tide will make a bigger wave than the physical rise in tides...

dubai world is a company, abu dahbi is the country...the country has trillions, and it is not crashing. the company put off it's debt repayment 6 months and it owes 60 billion. the royal family got pissed off at junior for not being fiscally responsible with the company he runs, and cut off his funding.

It's one big folly of speculation and greed. This will continue happening until we exhaust the planet of its resources and bankrupt our civilisation. Time to redraw the game plan. Focus more on sustainability, green energy, low birth rates and no SUVS etc.

reply to post by Esrom Escutcheon Esquire


Yeah lol!

That's the thing Dubai is like the Mecca of Commercial real estate. And technically asking for an extension on a loan is a nice way of saying "I have no money, and I will be default on my dept sorry.". This happened because investors have been pulling out of Dubai and there is not a single complex that is not still under construction.

Dubai is like AGI and the waves will comes crashing like a tsunami in all it's linked too.

Not good if you ask me.

reply to post by jimmyx


There, edited title to "The Fall of Dubai World".

I will say that Dubai World was very much favored Dubai, as a means of money if it's resources fell to low in production.

Originally posted by jimmyx
dubai world is a company, abu dahbi is the country...the country has trillions, and it is not crashing. the company put off it's debt repayment 6 months and it owes 60 billion. the royal family got pissed off at junior for not being fiscally responsible with the company he runs, and cut off his funding.

Abu Dabhi is an emirate of the country United Arab Emirates, but this is about the emirate of Dubai..The ruler of that emirate sjeik Mohammed Al Makhtoum said most of the foreign banks wont get their money back for queit some time..
Abu Dhabi is the emirate with much more oil[richer] and has lended Dubai about 25 billion, but that dont seem to be enough..
I dont hope what the OP said will occur with commercial real estate but Dubia has lived way above their standards for many years over the heads of phillipino's and more of their slaves, i dont care if it goes down, thelights is right we should invest in sustainable development and green energy and not building these disney worlds on quicksand..



[edit on 28-11-2009 by Foppezao]

[edit on 28-11-2009 by Foppezao]

reply to post by Izarith


Its just a MUCH bigger scale of whats happend. Here now in the UK, construction companys only build a new house when theyve recived a down payment, since they then know theyve sold it.
I know we all hear storys of 'celebritys' buying a 80 room mansion e.t.c. On these projects, but the way things are, theyve been too ambitious spending what they havnt got. Abu Dhabi (Abu Zabi) on the other hand, is where the big, big, big money is compared to Dubai. I dont want to sound like a fool, but im sure OIL will get more expensive again because of some extravigant life styles, spending habits and these current implications.

I believe it was an investor [Warren buffet?] who once said "dont invest in the country that is currently building the largest tower on the planet, those countries are most of the time at their peak and going downwards"..
Its true look what happened in Malaysia after they constructed the Petronas building[emerging market crises], the US after they built the Empire state building..
I believe Russia already cancelled the construction of the Russia tower, so yes something is going on in the real estate world..
What actually troubles me is that Dubai Ports World (DP World) daughter of Dubai world is a big investor in the Second Maasvlakte here in Rotterdam, this thing could trouble the expansion of the port over here..

[edit on 28-11-2009 by Foppezao]

Originally posted by jimmyx
dubai world is a company, abu dahbi is the country...the country has trillions, and it is not crashing. the company put off it's debt repayment 6 months and it owes 60 billion. the royal family got pissed off at junior for not being fiscally responsible with the company he runs, and cut off his funding.

Thank you for the only sane post, so far. This is one company and the debt is in the billions, US Debt is in the trillions! I'd be more panicked by that.

The UAE is not bankrupt, the US is.

Originally posted by deessell

Originally posted by jimmyx
dubai world is a company, abu dahbi is the country...the country has trillions, and it is not crashing. the company put off it's debt repayment 6 months and it owes 60 billion. the royal family got pissed off at junior for not being fiscally responsible with the company he runs, and cut off his funding.

Thank you for the only sane post, so far. This is one company and the debt is in the billions, US Debt is in the trillions! I'd be more panicked by that.

The UAE is not bankrupt, the US is.

Yes the US is bankrupt!

But this news in the US, which is the only country still convincing it's people that it's not bankrupt, will definitely sober investors and stock players up a bit. News like this is a big hit to the illusion that we are not in huge trouble.

The rest of the world is all ready in panic. Spain is at 20% unemployment and it's not covering anything up like we here in the US.

I'm just saying that now is a good time to invest in a little safety food to hold us over for a few months. A few months of rice and watter can be the difference between blowing your brains out and having a few months to figure out what to do.

Take it for what you will.

I fully agree. Hopefully every one here is doing just that. Rice, beans lentils, salt ect. Heed the warning. This is just another sign pointing to economic collapse. Actually I see it more as a flashing billboard.

Also now that no one in the world trusts US banks you can flush or service industry down the toilet. With out our service industry all that we have left is our commercial real estate industry. This means that the USA is in all it's worth another Dubai World. So this news is doubly bad.

If the commercial real estate industry goes bunk in the US we will have absolutely nothing left except government, state and military jobs. But in a capitalist country those jobs depend on taxes.

This means no money and huge taxes or face Communism if we can't come up with WW III.

There is something much bigger going on here. The middle class elites have been double crossed by the high elites. Some of them are pissed....really pissed. What do you think the Tiger Woods accident was really about?

Go to a God Like Place and search "Tiger Woods is being blackmailed."

The time to open your eyes is now. This one is a gem and is not a waste of your time. Promise.

Edit to add: It has everything to do with Dubai.
[edit on 28-11-2009 by Universal Light]

[edit on 28-11-2009 by Universal Light]

The "miracle" that was Dubai, was built on 80 billion dollars worth of loans to finance all the construction going on in Dubai.
Wasn't really a miracle after all. Most people didn't even know it as all built on loans, everyone thought it was oil wealth. Yeah, right.

Dubai was always going to go bust eventually.
When the gfc hit, tens of thousands were out of work there.
This is just the next step of the Dubai bubble going pop.

Doesn't affect anyone beyond Dubai really, except those who lent money. Banks etc.
The question now is how badly will it affect those banks, their shareholders, and their consumers, and obviously those banks ability to lend.

You would think that if DubaiWorld can't pay off it's debts, the lenders will come in and reposes DubaiWorld's physical assets, and sell them off to recover their losses.

.....

reply to post by BLV12


The problem is that it's all tied up with the rest of the world. Much like AGI had it's tentacles in everything.

And they can't sell anything off because just like commercial real estate in America Dubai's assets have passes through so many hands that determining who actually owns the assets is a never ending search.

Once default happens who started the game can't be determined so it can't be sold off to any one. Even if the assets could be sold off first they would have to determine how much it's worth which is impossible too. Then the have to try to sell it to people who only buy when things are going up in value and you can't do that once the bubble pops.

It's a dead horse, the ride is over for Dubai world and it will have systemic shock waves around the world of commercial real estate.

[edit on 29-11-2009 by Izarith]

I'm not sure I'm following the OP's logic on this post: How will Dubai's bankruptcy cause the overall collapse of commercial real estate?

I'm in commercial real estate, and for all intent and purposes, the market has already collapsed, it died and fell some 10 months ago. Average commercial prices today -- if you're even able to sell something -- is on average 40% lower than the peak price of 2007. In many cases, prices are down as much as 60%.

The CMBS market is all but obliterated; not a single new CMBS offering is being cobbled together as we speak without some sort of government backing to it. We bottom feeders have been active with FDIC auctions, buying up properties at a fraction of replacement cost.

If anything, I'm quite bullish on commercial RE investment at the moment. This is the once-in-a-lifetime period that will make the next round of real estate millionaires. Yes, it will take much longer for values to rise again, perhaps longer than we've ever experienced, but I guarantee you no one's gonna build a new office building -- anywhere -- or a new massive open air mall, so we've suddenly found ourselves in a nationwide supply constraint.

On a 10-year time frame, those who buy today are gonna be sitting pretty. And those with the money to play the Dubai game (certainly not me), and buy up those gaudy ill-conceived skyscrapers and artificial islands at a fraction of their costs will also be holding onto future lottery tickets.

Dubai gorged itself on oil. Oil may have crashed, but it's not going anywhere. Prices will rise again, and fairly soon.

To me, the unstated risk to the Dubai crisis has to do with the dollar. Remember, oil is still pegged by the dollar. With its value collapsing, this has exasperated Dubai's debt. My guess is we're going to see abrupt decisions by some oil producing companies to switch out of the dollar and into something like the Euro. This will instantaneously cause massive inflation for us, with fuel prices jumping at least a couple of dollars overnight.

[edit on 11/29/2009 by behindthescenes]

There is a lot of suppression. I know a dude who lost his job there, could not pay off his condo or car.. he fled out back home to Australasia, literally just abandoned his condo, most contents and left his car abandoned at the airport. His option was to stay and get imprisoned!