U.S. commercial property prices are likely to hit bottom next year after falling more than 40% from their 2007 peaks, real estate executives said in a survey conducted by PricewaterhouseCoopers.

 
    Banks that have been reluctant to foreclose on commercial properties or restructure debt will start to do so as they build up reserve funds with government capital, respondents predicted. Seized properties will become "highly attractive buying opportunities" for investors with cash, PricewaterhouseCoopers said today in its "Emerging Trends in Real Estate" report.
 
    Commercial property sales should pick up in 2010 after falling to their lowest level since the savings and loan crisis of the early 1990s.  The worldwide credit crisis has driven $138 billion worth of U.S. commercial properties into default, foreclosure or debt restructuring through September, according to New York-based property research firm Real Capital Analytics Inc. More than $250 billion in commercial mortgage debt will come due next year, followed by higher amounts in 2011 and 2012, the PricewaterhouseCoopers report showed.
 
    About $16 billion of sales may take place this year, or 93 percent less than the peak year of 2007, Real Capital has projected.  Owners will have trouble refinancing because lenders are curtailing credit, and falling real estate values mean an increasing number of properties are worth less than the debt owed on them.
 
Source: Bloomberg.net, David M. Levitt