Business-Property Outlook Sours

The hits, they just keep on coming. As reported in the Wall Street Journal this morning, Real Estate Roundtable conducted a survey of executives from around the country who reported - surprise, surprise - the market has actually gotten worse. What was most interesting to me was the comment that many have become more negative as to things turning around in the near future.

Business-Property Outlook Sours
By JESSICA HOLZER
August 13, 2008; Page C14

WASHINGTON -- Real-estate executives' outlook for the commercial-real-estate market has deteriorated as hopes dim for improvement during the next year, according to a Real Estate Roundtable survey.

More than 80 out of 100 senior industry executives asked said the general market has worsened during the last 12 months.

The share of executives expecting the market to bounce back even slightly in the coming year dropped to 53% in July from 63% in April.

Respondents cited the credit squeeze and the weakening economy as the chief culprits hurting the commercial-real-estate market. Nearly 90% of respondents predicted that commercial-real-estate prices will drop or stay flat during the next 12 months.

"Even though loan delinquencies to the sector are very low, the ongoing lack of credit for real estate has led to weaker property values and has stalled transactions," Roundtable President and CEO Jeffrey D. DeBoer said.

More than 80% of the executives surveyed said the availability of credit was "much worse" than it was a year earlier, although roughly two-thirds expect the debt market to improve during the coming year.

Respondents were more optimistic about the equity market, with roughly half judging the availability of equity financing as "somewhat worse" than a year ago.

However, more than half surveyed said that overall conditions in the real-estate market would be "somewhat better" over the next year.

The survey was conducted during the third week of July.