Commercial Outlook for 2010.

Commercial Outlook for 2010:

While there has been some progress over the past couple months that lenders say they are looking for commercial deals, that has not yet translated into more transactions… but is a good sign of things to come. There is still a gap between buyers and sellers, as far as cap rates and terms. However, 2010 will bring more movement in the commercial market for 3 main reasons.

1. Lenders and services will get serious about their distressed assets. We are starting to see more deals being offered by lenders as discounted notes and REOs. Banks are making a profit again and writing down distressed assets to the point where it makes sense to sell.

2. Commercial Banks & Life Insurance Companies will become more active. This is due partly to stronger customers, better quality real estate and conservative terms. When lenders are making money, it leads to more activity.

3. There is real pent up demand. Our cap rates will rise, which should close the gap between buyers and sellers and make the deals much more attractive.

How much more activity is yet to be seen. However, there are great opportunities in commercial real estate for 2010 and into 2011. A good investor will put purchases on the top of their list.