Thursday, June 4, 2009

Full Recovery of the CRE Market in 2-1/2 Years? The Global Economy

Robert Sanchez thinks a full CRE recovery could take as long as 2-1/2 years.  From The Saint Report (hat tip The Dirt Lawyer's Blog):

During a panel discussion for Pepperdine MBA alumni in downtown Los Angeles last month, Robert Chavez, former CEO and founder of Staubach LA and current president and CEO of Guardian Commercial Realty, said that a full recovery in the commercial real estate market could take 2 ½  years.

I previously posted on why I think this is unlikely given the current state of employment (post here). Another reason I think a recovery is unlikely to happen that fast is the state of the global economy. Now, I’m not much of a globalist (all real estate is local, right?), but there is no escaping the fact that this meltdown is everywhere, and that the world is more interconnected than ever. VoxEU has an extremely sobering post comparing current trends with those in 1929. Here are a couple of charts:



Before a recovery can start, things have to stop getting worse. There is nothing in current economic news to suggest we’ve reached a turning point.