Two Paths for Commercial Market in 2011
The commercial real estate market will be split in half next year, divided between “well-located and well-tenanted properties that can generate strong cash flow, and those that are overleveraged with high vacancies," predicted Urban Land Institute Senior Fellow Stephen Blank.

Blank said properties in international gateway cities will lead the market: Washington, D.C., New York, San Francisco, Boston and Seattle. Other cities likely to enjoy improving commercial value include Houston, Los Angeles, San Diego, and Dallas.

He expects strong properties to increase in value in the “high single digits.” But he believes valuations on weaker properties to “reset 30 percent to 40 percent below 2007 levels.

“Investors with cash could have excellent opportunities to seize market bottom plays by recapitalizing cash-starved owners or buying foreclosed assets,” Blank said.

Source: International Property Journal, Kevin Brass (11/13/2010)