How Long is a Generation?

OK, What's your answer?

Well, according to my Webster, "a generation" is about 30 years. Or about 3 decades.

Why, you think, is this reverent?

Well according to a large national and still-standing commercial Brokerage firm, Jones, Land, LaSalle, Inc. "the level of US commercial real estate deals seen in the boom years of 2005 through 2007 may take a generation to return!"

"US commercial sales in the first half of 2009 totaled $16 billion, down 80 % from the same period of a year ago, and off 93% from the market peak of $231.4 billion in the first half of 2007."

"The credit crisis, which accelerated at the end of last year, essentially shut down mortgage and lending and other loans critical for real estate sales and refinancing. Although the lending to select borrowers has resumed somewhat, the US recession pounded rents and occupancy rates."

"It is unlikely that any true debt liquidity will return to the market until mid-2010, at the earliest."

"Meanwhile, first year yields on the buildings purchases have moved up 2.5 percentage points.The yields, also called the cap rate, moves inversely to the price, and a 2.5 percent cap rate could knock a third off prices."

They may be a little to optimistic, for in Massachusetts, the decline in value / prices could range now from a low of 33.3% to to a high of 50% depending on location, condition and occupancy

This isn't as terrible as it appears because the market rebound will probably mean a more "normal and stable" real estate market.

Many are now predicting that the "recover" will not be a "V" shape but rather an "L"shape one meaning, a flatness, or straight-line recovery for commercial real estate values and prices for many years.

While this may not bode well for sellers it may well be a boon for some user-buyers. Time will tell.

But as I've said for my decades in the commercial real estate business, no one has a crystal ball!
BIll McInerney