Is the Next Commercial Bubble Imminent?

NEW YORK CITY-While the transaction market is expected to continue picking up over the next two years, panelists at yesterday’s “Investment and Finance Strategies for New Acquisitions and Development Today” conceded that enough is enough with the recovery chatter. As part of the Urban Land Institute’s “Real Estate Finance and Investment 2011” conference at the Sheraton New York Hotel & Towers in Midtown Manhattan, participants from CBRE Capital Partners, Prudential Real Estate Investors, Dune Capital and Bank of America Merrill Lynch agreed that investors with money burning a hole in their pockets should cool it, for now, at least.

“We are in the same bubble that led to the last crash,” said Ethan Penner, president of CBRE Capital Partners, explaining that FED is leading the industry down the same troubled path that led to the downturn in the mid-2000s. “It’s incredible to me that we mistakenly believe that pumping untold amounts of liquidity into the market is the answer to the problem to get asset values up.”