The bid-ask spread continues wide and will not converge until prices decrease much further. The anticipation of continued and greater strain will continue to place downward pressure on prices. Any asset brought to market today is under some type of stress. Buyers sense this. Sellers today are either: a) bringing to market underperforming assets draining their pocketbooks, b) anticipating far further future declines in values, c) desperate to raise cash, or d) eager to rebalance their portfolios into an asset class other than real estate.

Bid prices will also remain far below sellers expectations until increased liquidity returns to the financing market. Billions of dollars remain on the sidelines waiting to be deployed as prices decline. As of June 2009, buyers remain skittish on new commercial real estate investing. Unknowns such as the direction of unemployment, rising national debt, consumer confidence, interest rates and potential inflation all heighten uncertainty.

This uncertainty is reflected in increased equity and bond-market volatility. These challenges--and lack of clarity of direction--present a difficult environment for all real estate decision makers. Until liquidity begins to return to all asset classes and investment vehicles, both the bid and ask in commercial real estate will remain under pressure and historically wide. Only time will tell.