As the CMBS accounted for nearly half of all commercial lending in 2007, and limited financing options are available, Leventakis says cash will be king in 2009, therefore providing opportunities for pension funds, REITS and private investors. "Solving the national debt issue will be the number one catalyst to pump new life in the commercial real estate market."

[IMGCAP(4)]Although firms are pulling back, they still realize that the region has competitive advantages over our coastal neighbors, explains Mary Jane Olhasso, economic development director of the City of Ontario. "In Ontario, both industrial and office lease rates are 30% cheaper than Los Angeles and Orange counties," she says. "In the near term, as companies begin consolidating, they will do so in Ontario. Small enterprises and start-up companies will also take advantage of the region's affordable real estate and resources from the local universities."

Olhasso points out that Ontario has plans on the horizon. The Mayor and City Council have embarked on a General Plan Update called The Ontario Plan--a framework that "guides the City's investment for the next 30 to 40 years and creates a 'complete community' where people and businesses want to come and stay."

INDUSTRIALLeventakis says that the Inland Empire's industrial market is well positioned for a comeback when the economy improves because of the area's low-priced housing, ample workforce and desirable location for international shipping. "The developers and owners recognize the changing landscape of the economy and are adjusting rental rates and sale prices accordingly to preserve assets and attract lessees and buyers," he says. "The Inland Empire is Southern California's last stop for companies looking to establish massive distribution centers within reasonable proximity of one of the world's busiest port systems, where more than 40% of all containerized cargo enters the US."

RETAILAs for retail, certain retailers that have borrowed heavily to expand into the market will likely have some contraction, according to Richard Walter, president of Faris Lee Investments. However, in five or 10 years, Walter says that "we will start to see a lot of changes with housing that will positively impact the retail market. Residential values are dropping across the board which will ultimately create a more stable environment for retail. The housing affordability factor needs to be in line with employment in regards to salaries and wages. Once we hit that equilibrium, the Inland Empire retail market will start to grow on a more reasonable basis."

OFFICEOne the office side, "with medical office development on the rise in Orange County, but a lack of available land in the county to accommodate growth, many developers will readjust their focus to the Inland Empire," Leventakis says. He points to the region's more affordable cost-of-living when compared to nearby coastal communities as being a key factor in this readjusted focus.