This month marks Bernard Haddigan's 28th anniversary in the commercial real estate business. In an industry known for its transient employment, Haddigan has spent 26 years with the same firm, Marcus & Millichap Real Estate Investment Services. During his career, Haddigan has helped broker more than $3 billion in investment sales. For the past 13 years, he has been managing director of the firm's national retail group based in Atlanta.

In a recent survey of more than 1,100 institutional and private investors, NREI and Marcus & Millichap found the lowest level of confidence since the survey began five years ago, with 51% of respondents expressing plans to increase their commercial real estate allocations in 2009 versus 62% a year ago. NREI spoke with Haddigan about the state of the current investment markets.

NREI: Compare this downturn to previous downturns in your career.

Haddigan: This is by far the worst I've ever seen, and it's going to get worse. Depending on which side of the business you're on right now, some might be faring better than others. A lot of issues are putting pressure on operators. Forgetting debt for a second, across the U.S., property taxes and utility costs are generally on the increase, so even if you don't raise your rents you've got pressure right there.

NREI: Are long-term players positioned to take advantage of opportunities?

Haddigan: There will be opportunities, but are we going to see a distressed mortgage on a building on Park Avenue in New York, a $200 million loan that's going to sell for $100 million? We may if things get really ugly, but that's going to be extremely rare.

Maybe an opportunity on the retail side stems from this question: What do General Growth, Developers Diversified, Centro Properties Group or Kimco Realty look like a year from now? What kind of capital are they going to need? Is it debt or equity? There may be situations where the larger, well-capitalized institutions might be taking equity positions in some of these companies.

NREI: Which investors are sitting on cash?

Haddigan: Right now, I'm getting calls daily from large funds and investors, a number of them out of New York, who are saying they have $500 million or more and are looking for opportunities. The good news is that there is a lot of money out there, but we are not seeing bargains yet. As the bargains come through, most are going to be properties that need some expertise and some management and processing to maximize the returns.

NREI: What are your thoughts on the retail sector?

Haddigan: It's really going to be a case of the haves and the have-nots. Shopping centers with grocery, pharmacy and value-oriented product are going to hold up well. But centers that have a lot of apparel and electronics tenants are going to struggle. Many analysts are forecasting that we're going to see a tremendous amount of store closings in 2009. I think a lot more retailers are going to come under huge stress.

NREI: What advice would you give to any institutional player these days?

Haddigan: I've heard the line, “It will be heaven in 2011.” As a buyer, I think heaven is going to be the summer of 2009, when the buying opportunities are going to be on the distressed side. As an owner, it's the opposite. It is going to get worse before it gets better.