Commercial Real Estate Still on the Mend –

The economy is not out of the woods yet—at least from the perspective of Peter Roberts, chief executive officer for commercial real estate firm Jones Lang Lasalle.

Roberts said he’s not very bullish on the economy right now.

“Commercial real estate lags the economy. We’ve got to get the economy off its back and going before commercial real estate follows,” Roberts said in an interview with FOX Business Network Anchor, Brian Sullivan. “Because commercial real estate lags, that’s why we’re not that optimistic.”

Roberts expects office vacancy rates to peak near 20% sometime in late 2010 or early 2011. Commercial real estate markets, which had a heavy concentration of financial services firms prior to the recession, will be the hardest hit, Roberts said, since the financial sector suffered the bulk of the pain. He noted that there was one pocket of strength.

“Washington DC is the one that is probably most immune to what we’re experiencing in most of the country,” Roberts said, due to the expansion in government employment since the onset of the financial crisis.

Roberts is also on the board of directors at Corus Bank, which held $5 billion in loans on condominiums and other commercial property before it was put in receivership. In response to a question about what to expect from the bank’s loan auction, Roberts said, “there are definitely interested parties going back to looking for opportunities…a bunch of debt purchasers are going into that sector—watch that space.”

Story courtesy of Fox Business