CHICAGO-Recent highlights from the locally-based CCIM Insititute and Real Estate Research Corp. joint Investment Trends report show that fundamentals across all property sectors increased in the second quarter. Executives from the two groups said the commercial real estate industry is now in a stabilization point, and the recovery is becoming real.

According to the research corporation, preliminary 12-month trailing transaction analysis showed that second quarter 2010 sales volume for the office sector increased approximately 45% from the previous quarter, while the volume for the retail sector increased nearly 25%. Volume for the industrial and apartment sectors increased by approximately 15% and 10%, respectively.. Also, average price per square foot/unit increased for all property sectors during second quarter 2010, said the corporation. Office prices increased the most, with an approximately 20% increase in price per square foot during second quarter. The industrial, retail, and apartment sectors saw mid- to upper-single-digit increases.

Both Richard Juge, president of the CCIM Institute, and Ken Riggs, president and CEO of the corporation, said in a statement that with more capital available, the CRE industry is now more focused on property price resetting. “The money is there,” said Juge. “Capital is being invested in commercial real estate assets that have been re-priced to a level that makes sense and with sufficient deleveraging, meaning there's not too much of a loan above the value of the asset. The large institutions and other investors have been able to re-price their assets down by 40 to 50% while still maintaining a positive equity position."

In late 2009, many commercial experts believed a massive sell-off of properties would begin this year. However, banks have held onto distressed properties and leaving them on the balance sheet. “They will take them to the market when it's the right time and when the pricing can be properly achieved,” Riggs said. “It will be a slow, arduous, and challenging process, but I don't see it as being catastrophic or disrupting the current recovery."