"Housing, bonds, REITs have all suffered, now it's time forcommercial real estate to suffer," Dean Schwanke, senior vicepresident of the Washington, DC-based Urban Land Institute, told415 professionals at yesterday's forecast luncheon sponsored by theNorth Texas ULI chapter. Schwanke confirmed the present economicstate is the worst it's been since 1991. "Look for the fourthquarter to be a severe downturn," added the author of ULI'semerging trends forecast, a telling 71-page report based on 700interviews and surveys of leading industry professionals.

Schwanke's message wasn't for the faint of heart: three yearsand real estate will be back on track. "Real estate has been verygood to real estate investors and there's no reason to bail outnow," he said, tempering the brutal reality with tips for survivingthe storm. Fortify returns by putting good asset management andleasing teams in place along with workout specialists. Don't buildand don't sell unless it's necessary, a message that's dominatednearly every CRE forecast to date. But, he did offer a new tip:it's a good time to seek entitlements because the public sector is"much more receptive than before." And, by all means, go green.

In beating the Doomsday drum, Schwanke reinforced for the crowdthat "Texas markets are overall stronger than most markets aroundthe country." But, he cautioned that the state isn't immune fromthe minefield of issues tripping up the economy.