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Is Commercial Real Estate Bouncing Back?

A new report from Mike Kirby, chairman of Green Street Advisors, a Real Estate Investment Trust (REIT) research firm predicts that commercial real estate could see a bounce back in the future, giving some hope to growing property values in the future. Property prices are to remain choppy for some time as commercial real estate markets and the broader economy continue their slow recovery from the recession.

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Commercial real estate prices fell 40% as the economy stumbled in June, marking the first monthly price decline of the second quarter and the third decline this year, according to Moody’s. Buyers and sellers of commercial property are profiting with prices that are substantially above where deals are closing.

 The biggest increases in value are the same sectors that had the biggest decreases.  It was hotels and offices that went down most, and now it is these two, which has bounced back. The market will continue to face challenges, but commercial real estate experts saw enough positives in the quarter to be cautiously optimistic about continuing improvement in 2010.

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