Commercial Real Estate Headed for Recovery in 2010?

Watch this video from Fox Business which recently interviewed Harvey Green of Marcus & Millichap who gave his view of the state of the commercial real estate and when he expects the sector will recover.

I have to say I compltely disagree. How can anyone say that market is going to recover when it really has not been hit yet? The debt coverage ratio issues (LTV as value drops, LTV gets higher even though there may still be significant cash flow) are NOT going away, and the lending criteria is NOT getting more lenient, its getting tighter. Harvey even admits the lending critera must soften in order for the market (Commercial) to rebound upward. Thinking that is going to happen in 2010 (again for Commercial lending) is not realistic in my opinion.

We have not seen the Commercial market hit badly yet, The actual market here in Long Beach CA has remained quite stable. Sure there is lots of talk of its coming but the reality is that what I am experiencing first hand and what I am hearing from Commercial agents is declining rents, higher vacancies, and lenders getting uncomfortable with debt coverage ratios. These indicators are signs that future Commercial Sales will slow down significantly and more than likely follow the residential real estate market.

I am sorry, I dont have the expertise that Harvey has that is for sure but unless he is referring to National markets or something I just do not agree at all.

Please feel free to post your thoughts.

Sincerely,

Michael Simpson