Real estate executives in the US have warned the commercial property industry is in a “dangerous and precarious” situation with its future “highly dependent” on US government help.
Unveiling its quarterly sentiment index, the US lobby group the Real Estate Roundtable, said senior executives in the industry were more confident about the future and were ”beginning to see a glimmer of hope”.
However roundtable president and chief executive officer Jeffrey DeBoer warned in a conference call with journalists that that was “tempered” with concerns about the record mountain of debt coming due over the next three years.
He warned that the only way the real estate industry would find a “way out” would be if the US government was as “robust as it possibly can be in [the TARP and PPIP] programmes”.
Both the US’s Term Asset-Backed Securities Loan Facility and the Public-Private Investment Program are being seen as critical to restarting the flow of credit.
DeBoer said today: “If these programmes don’t come out soon and don’t formally start operating soon, we are highly concerned that … it could undermine the glimmers of hope out there. We are still in a very dangerous and precarious situation.”
The latest roundtable survey of more than 120 executives, including David Reilly of Cornerstone Real Estate Advisers, Robert Larson of Lazard Real Estate Partners and Jeffrey Furber of AEW Capital Management, revealed that 59 percent believed market conditions would improve over the next year, compared to 18 percent who thought it would deteriorate.