San Francisco LoopNet found, in response to its “LoopNet Pulse Poll,” that only one-third (33%) of respondents expect commercial real estate sales transaction activity to recover in 2009. Less than half (42%) do not expect the market to pick up until 2010, and a large number (26%) are not expecting recovery until 2011.
Forty-six percent of respondents see access to capital as the most significant obstacle to recovery. Economic uncertainty, which in turn significantly influences asset pricing, was the second most cited obstacle, at 29% of respondents. Close to a quarter (23%) of respondents explicitly cited differences in pricing expectations between buyers and sellers as the most important obstacle.
While the results were largely consistent across all three major participant segments, owners rate the importance of access to capital slightly higher, and differing price expectations slightly lower, than brokers or investors.
Two thirds (66%) of respondents expect that price declines of 10% or more from today’s prices will be required to restart the market, with 37% predicting 10% to 20% declines and 30% predicting declines north of 30%.
Marrying these results with patterns observed in the residential real estate industry, LoopNet said it believes demand-side activity from interested buyers may start to increase at least six months before transaction volumes start to reaccelerate.