Commercial Real Estate Transitions to Sustainable Growth

Commercial real estate performance generally lags economic growth by about four to six quarters. As our firm, ING Clarion Partners, suggested earlier this year, 2010 appears to be a transition year, moving from the steep downturn of 2009 toward a sustainable recovery in 2011. Real estate market values fell by about 32% from the peak in mid-2007 to the first quarter of 2010. The price decline was steep and quick, in contrast to previous recessions when write-downs dragged on for several years. Although we cannot predict an exact recovery timeline, we believe we are in the early stage of the next upturn cycle for well-leased core properties in primary markets.

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