When Is the Commercial Real Estate Market Going to Turnaround

Whenever I tell people that I'm in Commercial Real Estate, the questions that always comes up are "what's happening with the Commercial Real Estate market"and "when is it going to turnaround". (I'm sure that the Residential Agents get the same types of questions.)

Here's an extract from an interesting article by Randy Drummer that I received from the CoStar Group that gives one projection. Click on the Title to get the full article. (I would tend to agree with the article, but then, I'm trying to be an optimistic.)


Frozen By Fear: Forecasters Say Real Estate Likely to Hit Bottom in ’09

Moderate Development During Last Boom May Help Markets Avoid Deep V-Shaped Downturn. But Navigating Financial Meltdown May Prove Increasingly Tricky

Economics -- the dismal science -- earns its nickname during real estate down cycles. And following the shock of seeing Wall Street all but implode, it should not be surprising that the first round of forecasts for next year paints a fairly gloomy picture for commercial real estate -- though studious observers (especially those with ample cash for distressed property opportunities) may find a silver lining or two. (There's still hope if you have cash.)

U.S. commercial real estate is facing the prospect of its worst year since the depression of 1991-1992, with property values expected to plunge, foreclosures/delinquencies rise sharply, and a limping economy likely to put a crimp in property cash flows, according to the 2009 Emerging Trends in Real Estate report released Tuesday by the Urban Land Institute and PriceWaterhouseCoopers LLP.

Total expected returns on private equity real estate investments will likely drop into negative territory for the first time in nearly two decades as the market hits bottom next year. A weak recovery is expected to begin in 2010.

Your comments are always appreciated. Thanks for reading.