The Real Deal Miami

Commercial real estate turnaround expected, some say

June 19, 2009 11:02AM

Following major commercial real estate troubles, including a recent loan default at the St. Regis in Dana Point, California, and 25 percent decreases in revenue per room for Sunstone Group, the alarms are sounding for commercial real estate. Companies are finding themselves mired in debt, unable to refinance, Marcus & Millichap CEO Harvey Green told CNBC. Not all companies are experiencing hardships, though. CB Richard Ellis recently sold $100 million in stocks to hedge fund millionaire John Paulson at ten dollars per share. Jay Leupp of Grubb & Ellis also expressed some optimism for commercial real estate, especially in the public sector. Public real estate investment trusts have risen 18 billion dollars since November, Leupp said. “The first turnaround will occur in healthcare and specialty sectors that have been more recession-resilient with lodging, industrial, retail and finally office space following,” he said.