SANTA ANA, CA--Some year-end thoughts and comments from Bob Bach, (top right photo) Senior Vice President, Chief Economist, Grubb & Ellis Co.With the recession about to enter its 13th month, commercial real estate looks set to suffer through a cycle of rising vacancy rates, softening rental rates and increasing loan defaults, which has prompted industry trade groups to ask the federal government for help in refinancing debt.
The news is not all bad, however; an economic turnaround could begin by the end of 2009.
Barely detectable interest rates, low energy prices and various rescue packages that have already exceeded $1 trillion will help to reliquify the credit markets and jump-start the economy.
Capital temporarily parked in U.S. Treasuries a
nd other short-term investments will be redeployed into stocks, bonds and real estate when confidence returns.Due to the integration of global capital markets, that process, once it begins, could proceed fairly quickly, helping to reverse the rapid deterioration that occurred in September.
Despite the pain that is yet to come, the seeds of a recovery are being planted. Grubb & Ellis wishes you a prosperous and successful 2009.
For further information or to speak with Bob Bach, please contact Janice McDill at 312.698.6707.
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