Since the fourth quarter of 2007, commercial real estate values have dropped about 20 percent altogether, a price decline worse than those in the early 1990s, said CB Richard Ellis analysts as part of a live web presentation Wednesday. \tBetween the fourth quarter of 2007 and the end of 2008, commercial real estate prices dropped 11.5 percent with preliminary indications for the first quarter of this year looking like another 10 to 12 percent decline adding up to a cumulative impact of around 20 percent, said Raymond Torto, global chief economist with CBRE Research and Consulting. \t\u201cBy contrast to what happened in the 1990s, we\u2019re within the first year of declines. Then, the first year\u2019s decline was 4 percent. Things are dropping faster in the U.S. this time,\u201d Torto noted. \tAnd the falloff in prices has been widespread. In the United Kingdom, the decline in values is about 39 percent, which is also a faster decline than what occurred in the 1990s downturn, Torto added. \t\u201cIf you look at the U.K. decline versus the U.S. decline, they are similar if you compare the two of them. America is slow compared to the U.K.,\u201d said Brian Stoffers, president of CBRE Capital Markets. \u201cIf you talk to the professionals, things are much more severe than what is shown the index at this juncture.\u201d \tValuation levels are off today anywhere from 25 to 35 percent versus the peak pricing in 2007, said Greg Vorwaller, COO of CBRE Capital Markets. \t\u201cIn the U.K., I think (the 39 percent drop in values) is on the button,\u201d said Jonathan Hull, executive director of EMEA Capital Markets. \u201cIf you look at the market as a whole, different sectors and different countries are moving at different speeds. The correction in the prime markets may not be as severe as that, but in the secondary markets it may be even greater than 39 to 40 percent. It is mainly driven on the capital side.\u201d \tBut London has seen faster correction than other markets and is leading the way in comparison to the U.S., Hull said. The correction in the U.K. during the course of this year is on the rental side more than the capital side. \t\u201cIf you look at the London market today, there are more transactions as we speak,\u201d Hull said. \u201cActivity is improving. In the last two weeks of March, there were 700 million pounds of transactions into offer. That is a major movement compared to the rest of quarter,” he noted, adding that capital in the London market is driven by German market funds along with some private equity.<\/p>\n","protected":false},"excerpt":{"rendered":"
Since the fourth quarter of 2007, commercial real estate values have dropped about 20 percent altogether, a price decline worse than those in the early 1990s, said CB Richard Ellis analysts as part of a live web presentation Wednesday. Between the fourth quarter of 2007 and the end of 2008, commercial real estate prices dropped…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003962851","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n