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Seems like a week can't go by without a commercial real estate survey that is comprised of some good news with a lot of bad news caveats sprinkled about.
Take the latest survey from Ernst & Young, entitled Market Outlook: Trends in the Real Estate Private Equity Industry 2010.
According to the survey, 87% of industry players believe a gradual opening of debt and equity markets could begin to happen by the end of 2010. That could lead to what the report calls a “generational buying opportunity” by the first quarter of 2011.
The rub however, is that most of that 87% believe the market has yet to hit bottom and probably won't until early next year. So that could mean at least eight more months of people with money to invest waiting out the market, which could further extend the downturn.
“Significant amounts of opportunistic capital have been accumulated to invest in distressed real estate,” says Gary Koster, Ernst & Young's Global Leader of Real Estate Fund Services. “But simply stated, there is not enough distress to go around.”
Moreover, a solid majority of survey respondents believe the commercial real estate loan crisis going on inside banks nationwide is still in its middle stages. Indeed, 70% of the respondents expect banks to dump nonperforming loans at reduced rates in high volume through the rest of 2010.
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