Transaction Volume Picks Up, Recovery on Horizon

"There is plenty of money out there to buy good product," says Michael Caprile, vice chairman of CB Richard Ellis. He pinpoints the industrial market as a highly desirable sector, saying quality, well-positioned assets are hard to come by and highly sought after. For example CBRE recently marketed an industrial property that brought in 150 offers; bids that ran the gamut from highly regarded companies to a rancher in Montana.

Michael McDonald, managing director of Eastdil Secured, says he is seeing people getting back in the game who haven't invested in 15 years. After watching from the sidelines they believe now is the time to buy high-quality assets at a greatly reduced price.

At this point in the recession cycle, Dean Dornbos, managing director of Cushman & Wakefield Connenblick Goldman, says it is difficult to notice any specific trend, especially when it comes to cap rates. He says that each sale is different and completely individual. But, he adds, that certainly in the lat 30 to 40 days there appears to be more liquidity.

Al Pontius, national director of office and industrial properties for Marcus & Millichap, agrees. "I don't believe modeling works at all right now," he says.Where are the investors looking? Panelists agreed that multi-tenant industrial properties that are well-positioned in an industrial market were some of the top properties on investor's list of desires. Caprille pinpoints the Chicago and Seattle industrial markets, as well as the DC and Seattle office sectors.

The multi-family market still remains the strongest. Followed by the industrial sector. Caprille says the office market will take a lot longer to recover.Still even with al the recent positive movement in the market, panelists were unsure if the economy has really hit rock bottom or if it's experiencing a temporary blip. Pontius says he has "tremendous doubt" about where the fundamentals are. Panelists agreed the most worrisome thing about the positive figures is the lack of job growth and the continued growth in unemployment. "We can't talk office performance until we can nail job growth," Pontius says.

McDonald believes the market will hit rock bottom after this brief blip of recovery sometime in the first half of February, and at that point hopefully the employment rate will begin to rise again.