Published November 11, 2008
The future may not be quite as grim as some make it out to be. In a recent study conducted by Jones Lang La Salle (JLL) they discovered that almost half of the CRE professionals they polled expected activity and investing to pick up in 2009, a big jump from earlier and heavier skepticism.
JLL is a financial and professional services firm specializing in real estate services and investment management worldwide. That’s the good news. Now for the bad news.
Jack Minter, JLL Managing Director for investment sales, explains that the reasoning for the increase in optimism is exactly because of the credit market crisis. More CRE professionals than in previous studies expect that values and corresponding prices of property will decline, across the board, and make investment at “distressed prices” a good idea rather than a bad one.
While the retail sector is viewed with the most concern, office, industrial, and multi-family space don’t fare much better. Fully 94 percent of those surveyed expect retail investments to decline by 0 to 50 percent!
Seventy-five percent of respondents expect office investments will also decline by about the same amount. The outlook for the multi-family and industrial markets fare only slightly better.
The “good news” is that a larger percentage of respondents to this poll, than the same poll a year earlier feel that sales activity will be better in the coming year, producing a “flurry” of investment sales.
Small comfort, one might say, but small gleams are still light.
Paul Rosta, Senior Associate Editor