Roughly three-quarters of executives expect commercial property values (76 percent) and asking rents (73 percent) to continue to fall in 2010, according to a survey conducted by Deloitte.
About three-quarters (74 percent) of executives expect interest rates to rise in 2010; 48 percent expect rates to increase by 50 basis points or more.
Almost two-thirds (63 percent) of executives surveyed predict that a full recovery of the market will require 2 to 3 years, while 29 percent believe a full recovery will take 4 years or longer. Only 8 percent anticipate a full recovery within the next year.
“The commercial real estate market continues to be adversely affected by one of the deepest recessions in decades,” says E.J. Huntley, principal at Deloitte Financial Advisory Services LLP and national leader of the real estate consulting practice. “Increased unemployment has resulted in less demand for office space, reduced rents, and an overall decline in commercial property values.”