“Without the availability
of credit we’re all holding
our breath.”
and the default rate in CMBS loans still remains at only half of a percentage point.
Bob Gardner, managing director of
RCLCO, a real estate consulting and advisory firm in Los Angeles, says if history
is a guide, the recession will end within
16 months. Since 1950, Gardner says
the country has gone through 10 recessions lasting between six and 16 months,
meaning that the market could begin to
return in the fourth quarter of 2009.
Rather than focus on what’s wrong,
“The industry needs to look at the upside
and how to capitalize on the situation,”
Gardner says. “The industry will need to
make deals at bargain basement prices
with the expectation the economy will
get back on its feet in 2010, 2011, 2012
or 2013.”
“I think liquidity will return,” Hughes
predicts. “The era of cheap money is essentially over. Credit will return, but you
won’t see the feeding frenzy of the last few
years.”—SOCAL
JIM HUGHES
Greenberg Glusker
mixed-use R&D/office business park located
in Irvine. The project is 60% sold since construction was completed in August.
“Given the current state of the commercial real estate market, the volume of
transactions and the speed with which our
team has executed these sales is a testament to the quality of product offered at
Koll Center 3,” said Michael Hartel, senior
vice president of Voit Commercial Brokerage who, along with his team, is handling
the leasing.
As the recession deepens, more companies will likely become more involved in
providing services to those with distressed
properties. CB Richard Ellis in November
revealed the launch of a new initiative
called the restructuring services group
that brings together a range of CBRE capabilities for servicing distressed commercial real estate. (Visit http://www.globest.com/
news/1291_1291/losangeles/ 175301-1.html
for the full story.)
One reason for forming the group now
is that distressed assets are “such a complex
and moving target,” says Spencer Levy, the
senior managing director. He explains that
the problems began in the single-family
home market then gradually made themselves felt in land deals and projects under
development.
The distress will eventually creep into
other asset classes, but Levy says, “We don’t
expect material distress in core real estate
for some time.” He asserts that although
fundamentals are deteriorating, they are
beginning from a relatively strong point,
Let’s Make a Deal!
Industrial
Office
Retail
Multi-Family
Land
Medical
Investments
Amidst the current economic climate, NAI Capital
commercial real estate brokerage professionals are
still doing deals. Committed to providing exemplary
service, NAI Capital brokers are always working hard
for their clients, but today’s financial crisis has
challenged our team to work that much harder to deliver
solutions. Our brokers are savvy enough to see the silver
lining and to find opportunities in a down market. Now more
than ever, we look forward to continuing to build your
business and achieving your goals in 2009 and for years to
come.
800.468.2618 naicapital.com
Bakersfield | Commerce | Encino (Corporate Office)
Newport Beach | Ontario | Pasadena | Palm Desert | Riverside
Santa Clarita | Simi Valley | South Bay | Temecula Valley
Ventura County | West Los Angeles | Westlake Village
