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Survey of counselors finds 3 to 5 years for recovery.

Hopes for a swift end to the commercial real estate market downtown remain remote, with no recovery in sight for another three-to-five years, according to the annual member survey of the American Society of Real Estate Counselors, a specialized group of consultants who provide expert, independent real estate advice on property and land-related matters.

Seventy-five percent of the Society members (designated as CREs: Counselor of Real Estate) who responded to the fourth annual survey indicated no increase in capital flowing into real estate developments and no relief from the prevailing credit crunch.

"As long as regulators ride in the wake of the S&L debacle and keep financial institutions tight-fisted in financing new developments, the credit crunch will keep crunching," said James E. Gibbons, CRE, president of Sackman-Gibbons Associates, Garden City, New York. "What little capital that does flow into the marketplace today goes toward improving and preserving properties and to lease-up vacant commercial space. Substantial amounts of capital needed for new developments probably will not be available for five years."

Despite insufficient financing to bail out the industry, the Counselor rated industrial/warehouses, build-to-suit projects and apartment buildings as the most attractive areas for investment and development for 1992. The Southeast was viewed as the most attractive U.S. region for development and investment.

Fifty-three percent of the Counselors indicated that the leading source of financing for construction in the next two years will be domestic banks. Conversely, the Counselors cited domestic insurance companies as the leading source of financing for permanent loans in the next two years.

Over 50 percent of the Counselors responding to the member survey indicated that the single most significant factor to influence the recovery of the commercial real estate market is the absorption of excess office space. Running about 20 percent in metro areas nationwide, vacant office space faces an oversupply that could last into the next century. Fifty-one percent of the Counselors agreed that a national recovery in this sector would take longer than five years.

Conversely, 44 percent of the Counselor indicated that the retail sector would see a recovery in one-to-three years, and 58% said the industrial sector also would recover in one-to-three years.
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Title Annotation:American Society of Real Estate Counselors' forecast for real estate industry
Publication:Real Estate Weekly
Date:Jun 24, 1992
Previous Article:JGT industrial arranges three major leases in NJ.
Next Article:Waiting for a jump-start.

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