Commercial Real Estate Forecast 2009

As we bring 2008 to a close, it is becoming clear that we are in the midst of what could be a lengthy and prolonged recession. Our outlook for the commercial real estate industry changed dramatically during the third quarter of 2008 as the credit market unrest that first engrossed the national economy in August 2007 escalated into a full-blown global financial situation. Although it is difficult to predict just how severe the current downturn will be or how long it will last, we believe that we have not seen the end of weakening consumer and business confidence, slowing manufacturing activity and rising unemployment that is currently afflicting our economy. These are all factors that impact every aspect of the real estate industry, including commercial.

Within the commercial real estate market, the investment sector was the first to feel the effects of the credit crisis and, as a result, property sales were down by two-thirds during the first three quarters of 2008 as compared with the same period in 2007. As of today's date, access to capital remains extremely limited, and the leasing market is starting to more severely feel the effects of the economic uncertainty. Needless to say, this is probably the most challenging market real estate has experienced since the early 1990s.

Analysts say that the real estate market runs in cycles. At this point it will most likely be late 2010 before we begin to see a meaningful recovery upswing throughout the commercial real estate industry. However, there are some bright spots. Low oil prices and dropping interest rates will allow some commercial real estate sectors to recover quicker than others. And if you are a tenant with a requirement or an investor with cash, 2009 may offer considerable opportunity.

At Coldwell Banker Bain Commercial, we believe that within this challenging market there are opportunities. Our goal, as always, is to work with our clients and take advantage of these opportunities. We look forward to discussing the specifics of what 2009 has to offer with you, and to help you meet your real estate goals now and into the future.

Permalink

Michelle Choate

1/12/2009 7:09:06 PM

Thank you for taking the time to read our update for the commercial market for 2009. We appreciate hearing how the rest of the United States is handling this turned-down economy as well. Michelle Choate Administrative Assistant - The Moore Group

Kerry Post

1/12/2009 4:48:52 PM

This was a very insightful article! Being in California it is sometimes difficult to grasp the changes that are taking up in Washington. I found this blog very helpful to get an idea of what you are experiencing in Seattle, along with the rest of the nation. I'm saving all of my money so that I can be on the investor side of 2009! Thanks! Kerry Post, your CoStar Group Researcher

Michael Waggoner

1/8/2009 12:52:29 PM

Having said that, the greater Seattle metro area is surrounded by quality business and residential opportunities. Seattle was mentioned recently as "a sturdy market," saying it has become a "magnet for brainpower industries" and a global gateway. I believe the outlook is much better here than in other parts of the country.