Commercial rebound will be a long time coming

A commercial real estate rebound “will not be any time soon,” Moody’s Senior Vice President Daniel Rubock wrote in a recent report entitled “For CMBS, Recovery Appears Through a Glass, Darkly — and Slowly.” Rubock predicts the recovery could begin in late 2010 or early 2011, with the worst case scenario being a recovery beginning in 2012. Rising unemployment, vacancy and capitalization rates will continue to keep commercial growth slow. The commercial mortgage backed security delinquency rate currently stands at 3 percent and will likely rise to between 5 and 6 percent by the end of this year.

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