Real estate industry analysts are forecasting that 2010 will be another tough year for commercial real estate with prices expected to hit bottom, creating market difficulties not seen for generations. However, they also said that like any other depressed market, there would be unique opportunities for savvy investors with deep pockets. They say that the 2010 commercial real estate market will be an exercise in the survival of the fittest, with only the strongest developers and investors still around by the end of the year. In other words, commercial real estate analysts expect market conditions to get much worse before they recover with 2010 being the year that many creatively financed real estate deals made at the height of the commercial real estate boom coming due.

Regarding all the loans coming due in 2010, one analyst said, “So that’s a whole lot of mortgages that have to be refinanced. And how they get refinanced is the problem that’s out there. No one knows where the money is coming from. Most of these deals are underwater or have little or no equity in them and the lender’s not going to give you an 80 percent loan anymore. They’re going to give you a 60 percent loan.”

He called mortgage-backed securities the commercial real estate sector’s Frankenstein monster, saying that some lenders will be willing to extend mortgage terms while others will have no choice but to repossess some properties.

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