With the economy making strides, and the addition of private sector jobs, leasing markets are expected to continue improving as 2011 unfolds. The fourth quarter data confirms his view that the U.S. office market has entered the recovery stage and will likely make continued progress, assuming the economy stays on the current path, says Moore. Most encouraging is the 12-month-long gain in private sector employment, he adds.During the October-December period, professional and business employment was up 2.2% year-over-year, the report says. Widespread rent increases are still unlikely anytime soon, according to Colliers International.

The U.S. national office vacancy rate moved substantially lower during the fourth quarter, dropping 29 basis points, with 100 basis points equal to 1%. This represented the first drop after 12 quarters of rising vacancy. Office vacancies finished the quarter at 16.11%. Moore expects that to mark the beginning of a long decline in vacancy.

During the fourth quarter, downtown vacancies decreased 23 basis points to 14.81%, while suburban vacancy rates fell 32 basis points to register 16.69%.For the year, the U.S. national office vacancy rate fell 12 basis points after peaking in the third quarter.

Mr. Cohen’s is correct that some resolution has to be reached on the loans that banks have been extending for the last year before the market can fully “reset”. However, the only option for the borrower in his example isn’t just to pack it up and go home; recapitalization gives borrowers a chance to revitalize their projects and not lose the time and money they have already invested.

“My belief is that that the reset button can’t be hit until this industry takes its losses. The problem that exists is that the institutions are more capable to take their losses, both intellectually and economically. They’re creating revenues, they’re creating reserves, they’re writing stuff off.

“But the guy who has a $5 million shopping center and a $4 million loan, and who has $1 million in it and is going to lose $3 million or $4 million — that guy is toast.

“But it has to happen. This business is about risk. You are supposed to make a lot of money and lose a bunch of money. Guys who lose leave the game. Guys who win keep coming. So, people are going to have to take some losses. Until they do, we’re not done.”

-Jack Cohen, CEO of Cohen Financial

Investors expect cap rates for the core assets they’re invested in to either hold steady or decline through the rest of the year as interest rates remain low and debt markets continue to facilitate property trades.

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Read about Phoenix’s landlord crisis here.

In March, the unpaid balance on CMBS loans transferred to special servicing reached a trailing 12-month high of $79.83 billion, of which retail loans accounted for about 25 percent of that total, according to Realpoint LLC, a Horsham, Pa.-based credit rating agency.

Overall, special servicers remain reluctant to liquidate distressed loans because that would mean selling foreclosed properties at a loss. So far this year, the loss severity on liquidated retail loans has averaged 47.9 percent, according to Realpoint.

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Andy told the group that he believes recapitalization with private capital sources can help many of the nation’s distressed real estate owners and developers. To assist distressed owners, he shared a new recapitalization program that bypasses traditional banking sources.

“The Distressed Owner Recapitalization Program is aimed directly at distressed owners and developers,” he said. “For those unable to refinance loans, we can tie together the expert capital advisory services of Remington with access to hundreds of active private funding sources ready, willing, and able to recapitalize troubled commercial real estate assets across the capital stack.”

There have been several recipients of funding from the new recapitalization program by Remington.  One that I’ve worked on had Remington creatively restructuring the distressed owner’s business plan in such a way that the owner could successfully tap into our extensive network of private lenders and investors. Instead of having to sell or declare bankruptcy, the distressed owner secured through Remington an SBA 7(a) loan that allowed him to stay in the game.

“This is just one example of how creative financing expertise combined with access to private capital can help fill the potentially disastrous gap that is being created in the capital markets by the on-going liquidity crisis,” Andy Bogdanoff said.

If you’re a broker looking for fresh ideas to break through these challenging times, please give me a call and let’s discuss how we can help. Funding is currently available, and we welcome you to learn more about the program. Seminars are available 24/7 for you to learn more, too.  Thank you!  Travis Schmidt at Remington