What will Ignite Commercial Real Estate?

Published: Mon, 27 Jul 2009

Description: MIT Real Estate Professor David Geltner on the state of the commercial real estate market.

Automatically Generated Transcript (may not be 100% accurate)

" My next guest says the commercial real estate market is like -- game ticket right now prices are low but don't know wants to be the first to jump yeah. What will. Get going what will it take to get -- commercial property market moving once again and we closed. To any kind of bottom David Gardner's ability professor with MIT heels of -- Boeing's commercial real estate price index for joins me. This morning from -- Massachusetts David good to see you. The elections so -- the first thing that talked about there was. A market a marketplace for real estate transactions to occur. And you suggest it's not moving right now because you can't get say buyers and sellers to agree on price. When will it get moving what's the catalyst."

" Well that's that everybody would like to know. I think you're very near that the point where the -- and it's going to break and some buyers will start to jump in and that -- that a lot start things going again."

" Is the dinner about to break David because of what's expected to be north of 500 billion dollars of by the revolving loans that are set to expire real estate loans fixed set to expire. Is that what's -- caused the -- to break."

" I think the major factor is fundamentally going to be the prices prices have fallen into such a level now. Moody's index peaked at 192 back in October 2007. As of may it's down to 125. That's only -- 25 points above where it started in year 2000. So these prices are now looking. Pretty attractive or very close to being pretty attractive and I think that's what's going to it to bring people it."

" So would you would presume then that perhaps we are near a bottom for commercial real estate prices and the worst may be behind us."

" I think the worst is definitely behind us in terms of the price drop as we track it in the actual transaction prices for the same property. Price change and Moody's index. What's not behind this yet is is the volume than that transaction volume is still very low. But I think you know prices and volume is is triggered -- prices and so I think that volume will start turning out."

" All right well we'll keep an eye and it -- real estate professor at MIT thank you so much for joining us this morning. My pleasure."

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