On one aspect of the recovery—when we'll see it—there's less disagreement, at least among GlobeSt.com readers. Seventy percent of you voted last week that there's "not a chance" of seeing a recovery by the end of this year. We asked Raymond Torto, global chief economist for CB Richard Ellis, for his take on the recovery scenario.
"If you mean economic recovery, and measure it by Gross Domestic Product, I would say we will see some positive news this year. But if you measure it by jobs, and particularly office-related jobs, I would say no, we won't see recovery this year. It will be next year.
"To use a medical analogy, the economy is like a patient who has gone through a trauma and is now at stabilization in intensive care. And to bring it back to real estate, I would say your readers are right: the fundamentals are not expected to recover this year and in fact we expect them to continue deteriorating slightly through the end of the year.
"As far as real estate fundamentals go, some of the vital signs are starting to look positive and some are not all that positive. I would say they're 80% of the way to the bottom, but they're not yet at the point where we're going to release them from the intensive care ward. We would expect to release them at the end of the second quarter in 2010. Given the severity of the trauma, there would probably be an extended period of recovery at home, with no great exertion for awhile."
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
