NEW YORK CITY-Grubb & Ellis executives are not expecting a recession or major down turn in the commercial real estate market, but say that things will level out. In most sectors, this will lead to an increase in cap rates, flat rental and vacancy rates and a bit of uncertainty, said Robert Bach, the Chicago-based real estate services firm's senior vice president of research here at a 2008 forecast meeting.

“It's an interesting time, especially in light of the last few years,” he said. “Things have changed, definitely, and no one knows for sure what is going to happen.”

So far, lenders have pulled back due to previous poor investment decisions and waning confidence in the market, Bach said. He expects GDP growth, at 2% this year, to slip to 1.8% in 2008, impacting individual sectors similarly.