[turbo6bar]

I am in the Memphis, TN area.

Wayne, I do believe there is definitely speculative elements in commercial. The cheap money has certainly created some awfully low returns. In my area, there is an abundance of vacant retail space. I'm not so keen on that segment, because it's likely to take a big hit when the housing slowdown reaches full effect. There are a few nice properties anchored by national chain stores (Sherwin-Williams, Walgreens, etc), but I am not prepared to make a move on $3-6 million properties.

I work out that I can earn about 12-15% cash-on-cash return with a CAP rate of 10. The alternative is waiting out the single family housing bust. Assuming housing depreciates by 2-3%/yr (a very realistic bet since I play in foreclosures) and 5% in high-yield savings/treasury bonds, my do nothing return is 7-8%. That isn't a terrible low-risk move.
jurgen