The Commercial Real Estate Alpha Site

This year, pain to replace gain…

Nary a bright spot in CoStar Group’s first ever state of the Market/Industry Outlook…

The pain felt throughout the U.S. housing market over the past two years is going to catch up with commercial real estate in 2009 when the country will begin to see spikes in office vacancy rates climbing as much as 300 to 400 basis points with many markets expected to experience severe negative net absorption.

That was the assessment of Andrew Florance, founder and CEO of CoStar Group Inc., as presented in the company’s first-ever 2009 State of the Office Market review and outlook delivered this afternoon from its Bethesda, MD, headquarters and webcast to CoStar clients across the country.

Florance’s presentation laid out the economics and fundamentals detailing the impact of the financial meltdown on commercial real estate, finding little upside to report with all indicators projecting continued:

Constraint in the credit markets, Dearth of investment and construction activity, Corporate space contraction, and Falling property values.

The outlook is now for the current recession to take a higher toll, for a longer time, on commercial real estate than did the dot.com bubble burst of 2001-2002. Rather than try to reproduce the entire presentation or beat the dead horse that is the economy, here is recap of just some of the highlights.

CONTRACTION

INVENTORY BUILD-UP

MORE DISTRESSED PROPERTY

GO GREEN – Now I knew this last one would throw you a bit…. So for the complete article, please go to:

http://www.costar.com/News/Article.aspx?id=82F65EB97E014D8671AC245889156995&ref=100