2010 Spells Pain, Except for Smart Investors

SAN FRANCISCO-The general sentiment across the industry is that 2010 will bring even more pain to the market before showing signs of improvement. According to more than 900 commercial real estate professionals polled by the Urban Land Institute and PricewaterhouseCoopers, the industry is expected to bottom out at some point next year, a year after the residential housing market collapsed.

“Incredibly, this industry collapse is going to be worse than the early 1990s and the worse thing we’ve suffered since the Great Depression,” with expected value declines of 40% to 50%, on average, from the peak hit in midyear 2007, stated Stephen Blank, ULI’s senior resident fellow for real estate finance. Blank, along with PwC consultant Jonathan Miller, unveiled the findings of the joint study, “Emerging Trends in Real Estate 2010,” at the ULI conference here yesterday.

On the investment front, those polled believe the coming year will be the worst time for property sellers in the survey’s 31-year history, but that’s good news for buyers. Buying and sales activity may increase as borrowers and lenders feel increasingly pinched by the economic conditions.