When it comes to the real estate market, there are basically two areas: residential and commercial. The success and failures in one market does not necessarily transfer into the other. The same is true when considering foreclosures; there are residential foreclosures and commercial foreclosures and these markets do not always follow the same trend. For example, there percentage of residential foreclosures is a lot higher than in the commercial sector. Therefore, when examining the real estate market it is pertinent to look at both sides of the spectrum.

Over the last few months, we have continued to hear about the large shadow inventory, especially in Florida, when it comes to residential foreclosures. Home prices across the country remain rather low and mortgage application rates are less than desired. Clearly the residential real estate market is still struggling, but what about the commercial real estate market?

It is evident that the commercial real estate market is doing a lot better than the residential market; however, how much better? As with most things real estate, it honestly depends upon the location.

According to the Alternative Asset Analysis (AAA), New York has actually surpassed London when it comes to being the largest real estate market. With the crash of the stock market and the continual risky investment opportunities on Wall Street, investors have been turning their attention to commercial (and some residential) real estate investment opportunities in major cities. These investors view real estate as a safer investment than most stocks at this time.

In fact, even those in California are hopeful when it comes to commercial real estate as there may be some lending opportunities on the horizon.

Despite the optimism and success in large cities, commercial real estate investing has actually slowed down over the last three months. Specifically, commercial property transactions are down to $49.8 billion, from $58.5 billion. This decrease is more than likely due to the continuously unstable economy with the Obama administration and Congress together failing to pass legislation to assist those in need as well as the economic instability in other countries, like Europe.

Taking all of this information together and there are a few things that are evident. First and foremost, commercial real estate investing is still occurring across the country (especially in major cities), albeit slower than desired. Second, investors view real estate as a safer investment than Wall Street, which pushes money into the real estate market and therefore into the economy. Finally, despite the high optimism and continuous investments in the real estate market, the global and national economic situations are hindering the recovery process.

REITs – real estate investment trusts – are hot options for investors wary of stock volatility and disdainful of miniscule yields in 10-year Treasury notes and money market funds. They offer the potential for solid growth of 4-6% per year over the next few years, plus an average annual dividend yield of 3.7%. Plus, the prospect of a solid recovery in commercial real estate – which forms the basis for many REITs – gives this asset class an impressive upside potential.

Experts agree, which is why some have just upgraded one particular REIT and looked favorably on its future prospects. Investors Real Estate Trust (IRET), operating out of little-known Minot, North Dakota, owns a mixture of industrial, retail, medical, commercial, and residential properties across the Midwest and has a market cap of $602.85 million as of today.

Shares of IRET were upgraded to “Outperform” from “Neutral” by analysts at Robert W. Baird. The firm set a price target of $9 per share, which is roughly 19.5% above its current price of 7.53 (as of 11:48 AM EST). This upgrade was based off of an evaluation of its operations and its growth prospects, and also a comparison of price-to-earnings ratios and dividend yields with its competitors.

The current optimism for IRET is indicative of several REITs on the market today. Commercial real estate is apparently improving and has been on an upward trend across most parts of the country for the past six months. Industrial vacancy rates are also declining while rates are rising. Even residential space in some areas is improving and solidifying. All of this points to positive upside potential for REITs like IRET.

The main draw, though, continues to be dividend yields. Current dividend yield for IRET is 6.72%. This quarterly amount has not gone down in 161 consecutive quarters – which is just over 40 years. That kind of run is remarkable and points to the solidity of this particular asset and its holdings.

Industrial, office, medical, and retail space in the Midwest isn’t going to make anyone rich. But, it can do exactly what a REIT is supposed to do: provide steady income for those looking to buy and hold certain assets to balance out riskier assets in a portfolio, or merely to conserve wealth with a modest return. For investors in that demographic – which is most of who invests in REITs anyway – assets like IRET are good buys.

What is the commercial real estate market doing now? Are we still looking at the beginnings of a recovery?

First, we’ll look at projections to gauge whether or not the industry itself expects a recovery to occur. According to the National Association of Realtors, growth in the commercial real estate market is expected over the next 12 months – albeit at a slower pace than originally expected. NAR projects that vacancies will fall anywhere from 0.3% to 0.9% across various sectors within CRE by this time next year.

Not so fast, say others. Deloitte, a financial advisory firm, said that an abundance of underwater commercial real estate loans will come due over the next four years – worth as much as $1.7 trillion – making it difficult for the market to truly recover.

The weak economy is the main culprit. Businesses simply are not hiring as often as they would need to in order to support a full and true economic recovery. Instead, we have been witnessing a jobless recovery that has not managed to restore any semblance of underlying strength to the economy. As a result, many corporations are not expanding and, therefore, are not filling the CRE space they normally would.

Of course, there are bright spots. There has been a noticeable increase in demand and prices for the multifamily rental sector (i.e. apartment buildings), which has partially been spurred by the foreclosure crisis and the increased need for affordable rental units.

All in all, there is some strength in the commercial real estate market. Vacancy rates are dropping, and rental prices have been rising. Plus, an influx of foreign capital has bolstered the domestic market and given a bit of a foundation or floor to the market as a whole. And, depending on the region, capital expansion is on the upswing, which means more tenants for commercial properties.

Investors can capitalize off of the commercial real estate market by taking advantage of low interest rates, falling vacancy rates in some areas, and an increased demand for multifamily rental units that probably will not subside significantly for a year or two at the absolute earliest.

In short, while it is not completely there yet, the commercial real estate market is improving and may do so for the time being.

Want to start a business in New York or Washington, D.C.? Now is the time according to foreign investors, who are leading the way and pouring billions into the commercial market.

Anyone looking to invest in foreclosure properties should look into the commercial real estate industry, which is actually flourishing despite the rocky economy. As the Dow Jones continues its recent roller-coaster ride, investors are snatching up commercial real estate properties left and right – especially in gateway cities.

All eyes are on the development of businesses in New York City and Washington, D.C., which have experienced an increase in commercial real estate investments. Although U.S. consumers have wavering confidence in the nation’s economy, leaving many investors wary of purchasing commercial real estate properties, foreign investors are stepping forward with a plethora of confidence – and the cash to back it up.

Although there are some U.S. commercial real estate investors that are contributing to the stability, the majority of commercial real estate transactions are actually from foreign investors. China, one of the heavy hitters in New York commercial real estate investments, invested over $1 billion in commercial loans in the last year.

But why is China investing? Obviously they have a stake in the United States’ financial security since they are the backers for many U.S. loans. Furthermore, the Chinese government drastically wishes to increase its foreign affairs and opening more businesses in the U.S. is one way the country is seeking to fulfill this mission. Either way, China is definitely expanding onto U.S. soil and is snapping up commercial properties across the country, primarily in New York.

In the end, stabilization is occurring in the commercial real estate market despite the high unemployment rate and lower consumer confidence. Foreign investors are snatching up the inexpensive properties to increase their international presence – and lock in phenomenal profits – with China taking the lead.

Just glancing at foreclosure listings from Phoenix, Glendale, and other metropolitan areas in the state is evidence enough of how widespread the effects have been in the Grand Canyon State. Now another high-profile piece of real estate is facing foreclosure in Glendale.

The city, home of the Arizona Cardinals and Phoenix Coyotes, is also the home of the Westgate City Center, a flashy, high-end, and huge shopping complex that is co-located with the homes of the Cardinals and the Coyotes. Now, it is apparent that the Westgate City Center, a multi-million dollar chunk of commercial real estate, is facing foreclosure itself.

The city center opened in 2006 and has been a hot spot in the city since then. Now, the current developer, Steve Ellman, says he is negotiating with lenders to stave off foreclosure and keep the premises open for business – and presumably under his ownership.

What may happen instead, though, is that investors will swoop in and pick up the complex at auction, or, barring that, the lender will assume control.

It is unlikely that a property that size and worth that much will remain with the lender for long, though. It is more likely that a group of investors will take the property off of the lenders’ hands sooner rather than later.

Regardless, the potential foreclosure of the Westgate City Center is a powerful sign that no one really is immune from the foreclosure crisis. Plus, great opportunities for investing in the foreclosure market still exist – especially out west, in places like Glendale, Arizona.

The report has revealed that the number of foreclosed homes in Buffalo and in other boroughs of the city did not record rapid increases last year and that some of the aspects of the residential market actually improved during the 2000-2010 decade. The report also stated that the multifamily rental stock of the city has increased during the past ten years, reaching an estimated total of 55,000 properties.

Data for foreclosure homes in New York showed that the rate of foreclosure among apartment properties with at least 100 units has remained lower compared with foreclosure rates in smaller apartment dwellings. However, foreclosure among larger rental properties during the period 2006-2010 has almost doubled compared with the first five years of the decade, the study also stated. In addition, rental properties with at least 100 units posted the sharpest decline in prices from 2006 to 2009 compared with other types of multifamily rental properties.

The report has noted that residential and commercial foreclosure, particularly among multifamily properties, is correlated with residents' deteriorating conditions. It stated that foreclosures are often associated with increased residential code violations, which means that tenants in buildings that are under foreclosure are more likely to be living in premises that lack maintenance and have relatively poor physical conditions. The study has reported that rental properties under foreclosure receive around 21% more violations than those that were not.

Housing market observers in the city have revealed that a lot more people went into rental housing when the number of homes for sale foreclosures started increasing four or five years ago. In the whole city, more than 380,000 rental housing units are subsidized or under public housing support, with majority of tenants comprised of low or moderate income city dwellers. The biggest number of subsidized rental homes can be found in Manhattan and Bronx, the report also reveals.

New York City's residential and commercial foreclosure concerns are not as massive as in other big metropolitan areas of the U.S. Analysts stated that this is probably why the housing sector of the city has remained relatively better than most metro areas during the past ten years.

With foreclosure homes in Indianapolis and foreclosed commercial properties remaining at high levels, the metro area, along with most of the rest of the state, saw construction activities decline in the past year. Overall, fewer shopping malls, office buildings and other commercial construction projects happened in the whole U.S. in January 2011. According to the Commerce Department, building activities in the whole country dipped by 0.7% in January compared with December 2010.

The decline in activities during December and January caused the annual rate of construction spending to dip to an adjusted amount equivalent to $791.8 billion as of January 2011. The figure was near the decade record low of about $791.5 billion recorded in August of last year. Locally, commercial foreclosures and foreclosure homes in Indiana combined to cause the state to mirror building activities all over the U.S. Economists stated that the current status of construction is only half of the level that can be considered healthy. Most of them also stated that it will take at least four years before the construction market returns to normal.

Meanwhile, the high number of foreclosed houses and Handyman Special homes also affected home construction all over the country. Although home building activities inched higher by 5.3% during the month, private non-residential building activities remained poor, with housing spending reaching a rate of a little over $245 billion.

An oversupply of foreclosure homes and the recession that started around three years ago contributed not only to a slowdown in home building, but also to the poor performance of non-residential construction. The non-residential sector posted a decline of 6.9% in January, with spending going down to an annual rate of over $244 billion. The downturn was precipitated by fewer projects in the hotel and motel segments. Office construction, on the other hand, declined by 6%, while shopping center building dipped by 1.4%. Overall, private construction declined by 1.2% in January, with spending estimated at $490 billion.

Economists are predicting that construction will be much the same for the rest of 2011, with increased number of foreclosures and Handyman Special homes weighing down the residential and commercial property markets. They added that budget deficits at local levels will also hurt the construction sector.

Find more foreclosure listings in Indiana, IN:

• Indianapolis Cheap Houses
• Indianapolis Bank Owned Homes

There is also good news for the Sunshine State. Based on the same report released by a realty tracking firm, no Florida metropolitan areas were included in the list of metros with the highest foreclosure filings. Previously, 9 metro areas of the state topped the said list.

And even with the high volume of foreclosed homes in Cape Coral and Fort Myers area, it was not enough to rank them among the highest. The said metro area came in second in 2009 for the most foreclosure filings, but it was ranked 52^nd in 2010, with one filing for every 428 households.

The drop in the number of foreclosed homes in Florida can be attributed to the court’s stricter policies, which involve requiring the lender to properly process the foreclosure paperwork before deciding to file. Most of the nation’s largest lenders were ordered to address the robo-signing issue and they are now making sure all paperwork is checked.

For 2011, the state can expect more residential and commercial foreclosures, but not as many as before. In addition, more short sales and loan modifications will be approved, which will certainly make the current year a good one for the entire industry.

With over 68 million Americans about to retire and a significant number of baby boomers, Florida can also expect a healthier housing market activity since most of these individuals and families will look to reside in this state. Those who are looking for affordable housing will likely be pleased with the selection of foreclosure houses for sale and businesses will have more than enough choice of commercial foreclosures.

Property owners have complained about the proposed hike, arguing that the number of foreclosed properties, including Greensboro foreclosure homes and distressed properties in various areas of the state, is at record high and a rate increase at this period will be detrimental. They further asserted that, with property values continuing to decline, there should be no rate hike for insurance policies.

Business owners have weighed in on the issue, asserting that the rise in North Carolina foreclosure listings has resulted in financial difficulties for majority of state residents, and a rate hike will just be too much. The claims were made after the announcement that the state Rate Bureau has recommended a 21% increase in rates for home policies.

The Bureau has responded by stating that the proposed rate increase was based on anticipated losses. With the number of residential and commercial foreclosure property continuing to rise in the state, insurance companies are reportedly expecting losses in the coming months. The Rate Bureau also stated that they need a premium that will be enough to get carriers to continue doing business in the area.

The rate hike is projected to affect more than 570,000 properties in the state, including those that were purchased from listing of foreclosed homes, with rental dwellings believed to be the sector that will take the biggest hit. However, proponents of the hike stated that it will only affect rental houses that have four units or fewer, and large apartment structures will not be affected. A public meeting was recently held to address the issue and to allow property owners to express their views about the proposal.

Reports revealed that the rate hike will average by around 20%, but will vary depending on region, regardless of the status of residential and commercial foreclosure property numbers. Reports also speculated that the coast will experience the highest increase if the proposal is approved.

The rise in the number of Philadelphia foreclosed homes for sale and distressed properties in different areas of the region resulted in home buyers and real estate investors refusing to take a chance on regular residential properties which have lost steam in most U.S. areas. Right now, apartments seemed to be the most logical form of real property investments.

Despite being offered at heavily discounted rates, foreclosed homes in Pennsylvania are taking a backseat as investors focus their attention on apartment buildings. Recently, Red Rocks made the Coventry property available, while O'Neill Properties Group is looking for a buyer for the Londonbury property in Conshohocken.

Commercial real estate foreclosure, as well as non-foreclosure commercial property sales, has been improving in the area. In Philadelphia, a Korman Communities affiliate was able to unload the Rushwood apartment complex at Keswick Road for $34 million. Korman Residential, on the other hand, purchased Woods at Butler Pike for $30 million. The Woods is comprised of garden-style facilities and is currently almost 95% occupied.

Buyers like Korman are said to be concentrating more on apartment buildings instead of foreclosure homes as area residents are more likely to rent an apartment nowadays instead of make a home purchase. The Wood complex has been the target of Korman for quite some time according to company representatives.

The structure was previously owned by RREEF. Interior improvements have been done on the property which was built during the early 1970s. Korman has stated that they plan to renovate the club house of the property and add more features like a smoke-free area and a community garden. Buyers like Korman who have been looking at apartment buildings for some time are now making their move. More investors are expected to come to Pennsylvania and take their chances on other apartment properties for sale.

According to real estate analysts, residential commercial real estate foreclosure properties will continue to be in demand as long as the values of residential homes remain low. They stated that for the most part, both home buyers and investors believe that for-rent structures are more profitable than regular dwellings.

Find more foreclosure listings in Philadelphia, PA:

• Philadelphia Cheap Houses
• Philadelphia Bank Owned Homes