LoopNet Survey Shows Fading Hopes for Commercial Real Estate Recovery in 2010

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When will the commercial real estate market hit bottom and begin to recover? Nearly half of respondents (46%) to a LoopNet survey believe that the market transaction volume won’t recover until 2011 or later, up from 13% in July. More than 1,000 LoopNet members responded to the poll, which was conducted in the second half of October.

Meanwhile, the number of respondents who anticipate a rebound in 2010 or earlier has dropped significantly to 50%, down from 66% in July 2009. Nearly one in five respondents don’t expect a recovery in transaction volume until 2012.

Investors are a slightly more pessimistic group than all other respondents. Their median expectation for recovery is approximately one quarter later than that of brokers or commercial property owners, according to LoopNet.

Despite a drop in commercial real estate prices over the past quarter, 53% of respondents believe that commercial real estate prices will not hit bottom until they’ve dropped an additional 11% or more. That sentiment is virtually unchanged from the previous quarter when 52% of respondents forecast a decrease in pricing.

While all three groups surveyed — investors, brokers and owners — expect values to drop further, owners are the most optimistic, with nearly 20% saying prices have already bottomed.

The biggest barriers to commercial real estate market recovery, according to LoopNet respondents, are a lack of access to debt financing followed by high asking prices.

San Francisco-based LoopNet is one of the giant operators in the online commercial real estate marketplace. Among its 3 million members are commercial real estate investors, brokers and owners who use the company’s online platform to search for available space and investment opportunities, and to market available properties.


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