How To Tell When Commercial Real Estate Crisis Is Over

Almost all of the predictiions I have made over the past 43 years which have been published in one of my 249 newsletters have come true, and since they are all in print you can check me out! Here is my current prediction.  The commercial real estate market in the United States, especially in the office building sector, will be seriously challenged for the next 2-5 years. Foreclosures are becoming commonplace, with Class A office buildings which were priced in the $700-800/sf range just five years ago now routinely trading in the $150-250/sf range. Folks ask, how will we be able to tell when we have hit bottom and when recovery has started?  We will be bouncing along the bottom for the next few years as more loans come due and more lenders take themselves out of the office building loan business. When major lenders begin lending again, like the Bank of America, Wells Fargo and other major players, and Class A buildings begin selling for $300-350/rsf instead of half that-these will be the first signs that our recovery has started. It may take months or even years to get through this transition, and perhaps lowered interest rates and demolishing or repurposing of 10-20% of our office building inventory to increase occupancy in the remaining buildings  may help to speed this recovery. Please let me know what your thoughts are on this!