The Society of Industrial and Office Realtors in its SIOR Commercial Real Estate Index, a survey of more than 700 local market experts, suggests a flattening level of business activity in upcoming quarters with 55 percent of members expecting the market to improve in the second quarter.

The SIOR index rose 0.2 percentage point to 35.5 in the fourth quarter, compared with a level of 100 that represents a balanced marketplace. This is the first gain following 11 consecutive quarterly declines. Although some indicators show that a decline in commercial property values is beginning to flatten, 86 percent of respondents report prices are below replacement costs.”

Many of us have been waiting for the “other shoe” to drop (problems with refinancing commercial properties) in CRE. For now, it seems, the on-going problems in this sector are already broadly known and recognized, and fully discounted in financial markets. The second half of this year will be critical.