There has been a lot of talk about commercial real estate lately. I thought these two articles had good perspectives on what is happening in the commercial real estate market.

Was There a Commercial Real Estate Bubble?

A few economists have likened the commercial real estate market of the 2000s to the housing cycle. In fact, the commercial and housing markets were fundamentally different.

As recently as last week (see also here), Paul Krugman had claimed that the commercial real estate market followed a “bubble” much like that of the housing market, and thereby concluded that the housing bubble could not be blamed on anything unique to the housing sector.

Mr. Krugman observed that real estate prices went up, and then came down, in both the residential and nonresidential sectors. For example, he has presented the chart below comparing the Case-Shiller index for housing prices with a commercial real estate price index from Moody’s.    –more

2010 REI Outlook: Real estate investors planning on buying commercial properties like it’s 2005

After a quiet year of investment sales, buyers are preparing to forge ahead with acquisitions in 2010. Two-thirds of investors (65 percent) who responded to the 6th Annual Investment Survey plan to boost their investment in commercial real estate over the next 12 months.

That figure is up from 56 percent in the third quarter and 51 percent a year ago. The exclusive survey is produced jointly by National Real Estate Investor and Marcus & Millichap. The fact that buyers are once again returning to the table is a huge vote of confidence for a commercial real estate industry that has been slammed in the past year by falling property values, occupancies and rents. Respondents to the annual survey who do plan to expand existing portfolios anticipate an average increase of 26 percent, up from 24 percent in the third quarter and 22 percent a year earlier.   –more

Technorati Tags: Case-Shiller index, Real estate bubble