Where Are Commercial Real Estate Prices Heading?By
The other shoe to drop. I can’t tell you how many times I’ve heard that expression about the commercial real estate market. But what do the people in commercial real estate really think will happen to their business?
LoopNet, which is a fascinating site if you’re looking for investment property, just came out with a survey of 1,500 commercial real estate investors, brokers and owners.
Some of the findings:
• Only 1/3 of respondents expect commercial real estate sales activity to recover in 2009. Most think the market will not pick up in 2010. A large number (26%) are not expecting a recovery until 2011. • Two thirds of the respondents expect that price declines of 10% or more from today’s prices will be required to restart the market, with 37% predicting 10-20% declines and 30% predicting declines north of 30%. • As a group, owners are more optimistic, both in terms of recovery timing and expected price declines, than are investors and brokers.
By the way, I like LoopNet because commercial real estate brokers gives you much more detailed information on properties than residential ones. On LoopNet you can find 14 page reports with multiple photos, rental info, operating costs, comparable sales. A lot of times on the multiple listings service you’re lucky to get a photo that’s in focus.
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