Grubb & Ellis recently sponsored an annual real estate forecast on the ever changing commercial real estate industry. Unfortunately, at this time and for the foreseeable future it appears that the changes are not going to be for the better. With the tightening of the credit markets now on a global level, funds have become increasingly harder to obtain for potential investors. This real estate forecast agreed with many real estate professionals that we most likely have not hit rock bottom yet.
The real estate forecast discussed the national and local snap shots of the commercial real estate industry. On a national level, a short-term recovery is not likely even with the recent bailouts that have made their way through government. As the economy weakens, credit markets become stricter, and the property values fall, this creates a snowball effect and puts us in the downward spiral that we are encountering.
One bright spot from the real estate forecast is the position Northeast Ohio holds as compared to the rest of the nation. Our area has seen some stability in the office and industrial markets. Even though occupancy rates have fallen in some areas, many of the large players in the Northeast Ohio area such Eaton Corporation, Huntington Bank, Ernst & Young, Developers Diversified, Progressive Insurance, University Hospitals, and the Cleveland Clinic have announced new construction/expansion, or relocating plans that will occur in the next couple of years.
With this information, it is still believed that we will not see the beginning of a turn around until 2010 at the earliest. While 2009 will present great opportunities for the right investors, it will present more others with more of the same problems that we have seen to this point.