When we see that this is occurring against a background where vacancy rates are rising, rents are stagnant or falling, and a large increase in new supply is coming on stream, it suggests to us a mis-allocation of investment, and the likelihood of a shakeout in the market, at least in the major cities.
Small businesses owners, who in the past might have tapped into the equity in their homes or used their homes as collateral for small business loans, also have found conditions challenging in recent years. The stock of small loans to businesses on bank balance sheets at the end of last year was more than 15 percent below its peak in 2008.