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Economics, Industry NewsCommercial real estate to hit bottom in 2010, says expert
When it comes to investing in commercial real estate, 2010 promises the opportunity of a lifetime — but only if you’re dealing in cash, says one expert. Otherwise, the picture looks pretty bleak.
“It’s going to be a sobering year — worse than the early 1990s, worse than the Great Depression,” said Chuck DiRocco, director of real estate research at PricewaterhouseCoopers LLP and one of the principal researchers of the Urban Land Institute (ULI)’s study, Emerging Trends in Real Estate® 2010.
DiRocco said commercial real estate will “bottom out” in 2010, with lots of painful defaults, write-downs, foreclosures and workouts. But the scenario is good news for investors with cash, who can buy quality properties at low prices in this buyers’ market.
Unlike the residential housing industry where, according to NAR’s Chief Economist Lawrence Yun, prices are expected to stabilize in 2010, the commercial market is expected to sustain value declines averaging “more than 40 percent off mid-2007 pricing peaks,” the study indicated.
Still, DiRocco says commercial investors would do well to deal in cash and focus on quality properties.
“We forget that real estate is a cyclical investment,” he explained.
DiRocco was a featured speaker before hundreds of agents, brokers, bankers earlier this week in the Harrisburg area at the 2009 Real Estate Symposium sponsored by the Central Penn Business Journal.
Now in its 31st year, Emerging Trends on Real Estate® reflects the views of more than 900 industry experts – investors, lenders, brokers, developers — surveyed by ULI and PriceWaterhouseCoopers.
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About Thea: Thea Hocker is the Director of Marketing & Communications at the Pennsylvania Association of REALTORS®. |
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