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Commercial Real Estate Investors Turn More Gloomy

November 3rd, 2009

pimg alt="loopnet.jpg" src="http://www.businessweek.com/the_thread/hotproperty/archives/loopnet.jpg" width="146" height="112" //p pa href="http://www.LoopNet.com"LoopNet.com/a, a Web site for commercial real estate listings, took a poll of 1,000 its members in the last two weeks of October. LoopNet members include real estate investors, brokers and owners. The results suggest that unlike those in the rebounding housing market, commercial real estate players are a little more gloomy./p pstrongWhen Will the Commercial Real Estate Market Recover?/strong/p pIn July a vast majority (66%) expected the volume of commercial real estate transactions to rebound in 2010. Now that number has decreased to just over 50%. Instead there has been a sharp increase (up 13% to 46%) in those expecting the recovery won't occur until 2011 or later. Investors are more pessimistic, with a median expectation of recovery timing that is approximately one quarter later than that of brokers or commercial property owners. /p pstrongHave Commercial Real Estate Prices Hit Bottom Yet?/strong/p pMore than half of all respondents expected to see future declines of 11% or more. All three groups surveyed expect values to drop further. Owners are the most optimistic, with nearly 20% saying prices have already bottomed./p pstrongWhen Will Commercial Real Estate Sales Prices Hit Bottom?/strong/p pExpectations for when pricing will bottom mirror that of when transactions will recover: The second quarter of 2010 was the most common choice, but more than 10% said 2012. /p pstrongWhat are the Biggest Barriers to Commercial Real Estate Market Recovery?/strong/p pLack of access to debt financing is the #1 barrier to market recovery, according to survey participants. High asking prices were the #2 reason cited by investors and brokers, while owners considered this less of an issue. Uncertainty about future cash flows remains a significant factor./p pTreasury Secretary Timothy Geithner told the Economic Club of Chicago last week that commercial real estate would not be a drag on the nation’s banking system the way housing markets have been. "That's a problem the economy can manage through even though it's going to be still exceptionally difficult," he said.br / /pimg src="http://feeds.feedburner.com/~r/bw_rss/hotproperty/~4/rfWkAhXEzsY" height="1" width="1"/

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