Commercial Real Estate Activity Dampened by Credit Crunch

Commercial real estate activity has been set back by a combination of the nation's general economic downturn and a severe credit crunch. In fact, according to a forward-looking index, the forecast for commercial real estate sectors will remain weak for the remainder of 2009.

Economists blame significant job losses, which have reduced the demand for commercial space, and a lack of credit, which has stalled transactions and refinancing activity. The situation could slowly become better, according to experts, if the Federal Reserve increases liquidity by purchasing commercial mortgage-backed securities. Financial experts speculate that commercial real estate activity can be expected to decline over the next six to nine months.