National Economists are Optimistic for Commercial Real Estate
While commercial real estate has its struggles Nation Wide, and in St. George, Utah, some economists predict that the market could see signs of steady improvements, particularly in commercial lending.
At a recent Commercial Real Estate Business trends Form at the 2010 REALTORS Conference & Expo, Chief Economist for the NAR, Lawrence Yun said “Banks’ profits have returned to healthy levels. As a result, it is inevitable they will return to the business they were created for, which is lending. Commercial real estate has experienced a sharp price correction, but there is still a shortage of buyers because of lack of adequate capital resources.”
Hugh Kelly, a professor of real estate at New York University Schack Institue of Real estate added said “The banks are in the driver’s seat, meaning they can cherry-pick deals and there is no stigma to turning away business,” he continued, “The capital flow in the commercial real estate market has been very selective. To achieve full recovery, lending practices must improve.”
Most of the Commercial Real Estate deals we are seeing in St. George, Utah, and throughout the country have been SBA financed, or cash deals. In order for the market to become more competitive there needs to be more buyers, and in order to have more buyers there needs to be money more accessible to legitimate business owners.
