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DETROIT-After weeks of speculation, Chrysler filed for Chapter 11 bankruptcy at the end of last week and subsequently entered into a deal with Italy’s Fiat. The moves are meant to transform the struggling car company into “a vibrant new company with a wealth of strategic advantages,” Chrysler’s CEO, Bob Nardelli, says in a statement. “It enables us to better serve our customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution.”But while Chrysler and Fiat appear to be optimistic about the futue many in the commercial real estate industry have added one more notch to the growing list of concerns about the state of the industry.

“As a Detroit native, we are all very bullish on any plan to help preserve and restructure the auto industry,” says Steven Chaben, first vice president and regional manager of Marcus & Millichap in Detroit. “This community is on pins and needles waiting to see what will ultimately happen.”

Today Chrysler has closed all of its 22 US plants, with plans to keep them closed until coming out of bankruptcy. How long these plants will remain closed is uncertain, although Chrysler executives expected the company to emerge from bankruptcy within 60 days. But it is not just the Chrysler plants that are impacted. Suppliers will now see a dramatic decrease in product consumption and could therefore be forced to downsize.

“The commercial real estate market is always likely to contract when one of the largest corporations in town restructures via bankruptcy or a merger, and in this case, you have both,” says Fred Liesveld, EVP and managing director of Grubb & Ellis. “There is no doubt this will have a measurable impact on our market.”

Just what kind of an impact and how all-encompassing it will be remains to be seen. “The US auto industry has struggled for a long time and has had serious structural issues,” Chaben tells GlobeSt.com. “The auto makers’ ability to cure their issues on their own didn’t look too promising. If it’s a bad solution, the bad here just gets worse.” Still Chaben says the market is optimistic about a quick solution. “It’s too early to tell how the bankruptcy reorganization will impact the local market. At this point, everyone is hopeful that this is a solution, of sorts.”

While the future of the automobile industry and its suppliers hangs in the balance, other industries are being courted to the Detroit area to fill the void. “We have seen some momentum in the form of interest from non-automotive companies, including alternative energy firms and the film industry, indicating that the market could be weaning itself a bit from the auto industry,” Liesveld tells GlobeSt.com.

All eyes will be on Chrysler as the courts begin restructuring the company, still it’s not over yet. “Though we should be making every effort to diversify, let’s not give up on cars yet – the commercial real estate industry long reaped the benefits of being closely tied to the automotive industry, and I see that returning to some extent when the automakers return to profitability,” Liesveld says.

Brokers from CB Richard Ellis declined comment due to client considerations.

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