...A lack of liquidity remains the major obstacle to a recovery in the commercial real estate markets at least until the end of this year, according to real estate finance expert Stan Ross, chair of the USC Lusk Center for Real Estate. We will also see a curtailed supply of new construction, more focus on cash flow, new incentives for tenants, greater equity required of borrowers and increased government regulation, said Ross, who estimates he is experiencing his 10th real estate cycle...
...For well-financed developers in no rush to break ground, the current slow market bodes well. Lumber, steel, concrete and labor fall to the bottom of the cost cycle whenever development and manufacturing are stalled. By locking in material and delivery dates, and taking advantage of historically low interest rates, owners will ride out this market until conditions are right to build, said Richard Green, Ph.D., director of the USC Lusk Center...
January 30, 2009