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Last week’s GlobeSt.com Quick Poll asked readers what they thought was the best solution for the failing American auto makers. A total of 80% of voters responded that a Chapter 11 restructure would be the best conclusion, while 17% voted for a Fed loan and only 3% for a Fed bailout. Readers got their wish when the US Senate blocked the $14 billion bailout effort passed by the House last week. Michael Fay, president of Coral Gables-based Colliers Abood Wood-Fay, is an expert on the implications the auto industry crisis has had on real estate. He tells GlobeSt.com about his experience through the firm’s four-year-old automotive real estate services group, which has been facilitating dealership transactions throughout the state.

“From what we see, there is now a consolidation marketplace. Dealers are putting more brands of cars on one lot than they were before. For example Chrysler, Jeep and Dodge will now be run out of one dealership instead of three. Excess real estate from closed dealerships will be put on the market, most of which are located in phenomenal sites that have never become available before, and can be used for retail, mixed-use projects or even offices.

“There are about 22,000 auto dealerships in the country and it is believed that within the next year and a half that number will be down to 17,000. While this is creating a lot of new business for us, it’s still hard to sell these properties because of the other issues going on in the market, including the lack of liquidity. If we were in a normal market these dealerships would have been selling in no time, but the underlying problem is we have deeper economic issues.

“The auto industry has got to change the way they do business, build more fuel efficient cars and create better manufacturing situations. People say you can’t bail out companies, but the problem is that a lot of what America was built on is the auto industry. To have a bankruptcy in the industry today is going to hurt America across the board because it has a ripple effect. Besides the layoffs of the manufacturing workers, the suppliers that make the pieces that go into cars will lose business and will have to file bankruptcy, right down to the tool manufacturers.”

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