The recovery of the commercial real estate market is years away,according to magnate Sam Zell,Chairman of Equity Group Investments.We haven't had a major commercial real estate asset committed since July of 2007,Mr.Zell says,and it will be another 12-36 months before that happens again.I don't think normalization will provide equity to the current owners.The bottom line is,there's more debt than value.You're not gonna get anything if you do sell,Mr.Zell pointed out.
In his own case,Mr.Zell sold Equity Office for 39 billion dollars in 2007,at the top of the market.Somebody made him a Godfather offer,he jokes,and when you're not buying,you're selling.
I don't believe commercial real estate is the next leg down,Mr.Zell stated.The kind of real estate that regional banks loaned against was smaller,local-not institutional.Condominiums do not qualify as institutional real estate,Sam Zell indicated.Some observers have been warning that commercial real estate will likely cause a double dip recession when owners fail to get the refinancing they need as their loans come due.
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