Stay Alert and Stay Alive

NEW YORK CITY-With three months’ experience traversing the post-meltdown landscape, it’s now possible to survey that landscape more discerningly and to start drawing a map for the best route over rocky terrain. The uncertain state of the current market “actually sets the stage for a great cycle coming out of this,” said Hessam Nadji, managing director of research services for Marcus & Millichap Real Estate Investment Services.

Answers to how long the down cycle could last, how the commercial real estate market will gradually emerge from it and keys to survival in the meantime were all on the agenda in an hour-long webinar featuring Nadji and three other CRE experts. Titled “The US Economy Part II–What Can We Do to Survive?,” the Dec. 17 discussion was moderated by John Salustri, editorial director of Incisive Media’s real estate group. Part I of that discussion occurred in July–a pre-meltdown, pre-TARP era in which, as Salustri put it, “there was no real sense of the pain that would follow.”

Although the current down cycle–finally acknowledged officially as a recession earlier this month–may seem unprecedented, it does have historical antecedents. Raymond Torto, chief economist for CB Richard Ellis, likened it to the 1957 recession in its sharpness, suddenness and, potentially, its depth. Nadji said he sees elements of that cycle as well as the 1981-82 downturn, although he doesn’t think the unemployment rate will reach the heights of either of those recessions. “We’re in the worst of it now,” he said.