ING Sees 'Short, Shallow' Recession

NEW YORK CITY-The easing of a “short and shallow” recession at year’s end will be followed six months later by an upturn in commercial real estate fundamentals, which nonetheless are already solid. That was one of the long-term predictions offered by ING Clarion today in a presentation outlining the findings of its new market research report, “Real Estate Investment: Finding Value in a Changing Market.”

“It almost doesn’t matter who wins the debate about whether we’re in a recession or not,” said Stephen Furnary, chairman and CEO of ING Clarion, in a press briefing at the company’s offices here. However, he said, US commercial real estate on the whole has not yet felt the effects of the economic downturn, and any flattening of income growth so far has not been meaningful.

On the other hand, the debt crisis has made an impact on the appetite of would-be investors. Furnary noted that the Q1 volume of transactions for his company this year is one-third the normal level; ING Clarion racked up transactions totaling $5 billion per year in both 2006 and 2007. He predicted that the logjam will not break until investors believe that pricing has hit “rock bottom.”