China has engineered a commercial real estate bubble, and the consequences might bear out in 2010, Daniel H. Rosen writes in a Wall Street Journal commentary. China is trying to prevent the bubble's burst by stepping up urbanization, but that could translate into oversupply problems. But Rosen says those fears are unfounded. "If China is already suffering overcapacity in everything, then indeed swelling the urban population would just exacerbate problems. But it isn't. In fact, there are huge swaths of economic activity and employment simply missing from the Chinese marketplace," he writes.
Prices of recent commercial real estate deals suggest that the market won't undergo a quick recovery, Merryn Somerset Webb writes in a Financial Times commentary. She points to Boston's John Hancock tower, which sold for just $660 million after the previous owners went into default on some loans. "The market seems to have stalled for now and it will probably need clear evidence of an actual upturn in the global economy to move upward again. I can't think where it will get that from," she writes.
Corporate real estate departments are playing a dual role in trying to create value while also protecting it, according to the 2009 State of the Industry Report by CoreNet Global, a survey of more than 60 corporate real estate executives. Well-prepared companies could profit when the economy rebounds and demand for space increases, according to Richard Kadzis, director of special projects for CoreNet Global. "The environment we're in poses the risk of being short-sighted," Kadzis said.
First Property Group Plc. plans to spend as much as $277 million buying commercial real estate in eastern and central Europe over the course of the next two years. "All sellers on the market now are distressed and need to raise cash, so this is a brilliant time to buy; you just name your price," CEO Ben Habib said. First Property is a commercial property fund manager based in the U.K.