CRE Lending 'at Virtual Standstill'

The commercial real estate sector is at a virtual standstill, with lenders on one sideline and borrowers on the other, each waiting for the right investment opportunity, specialists said at the Urban Land Institute's annual fall meeting in Miami Beach. They also agreed that the credit markets are, in the words of Randy Reiff, senior managing director at JP Morgan, New York, in a period of "protracted restructuring." Last year at this time, Mr. Reiff was at Bears Stearns and had $28 billion to invest. Now, at JP Morgan, he has only $5 billion to $7 billion at his disposal. "I definitely don't think the credit crisis is a blip," he said on a panel with other capital market experts. "It's gone far past a blip. As far as the pendulum has swung one ways, that's how far back it's swung back now." John Kukral, president of Northwood Investors, Greenwich, Conn., took a more optimistic view. "My feeling is that we're back to normal after being abnormal for the last five years," he said. But Mark Gibson, executive managing director of Holiday Fenoglio Fowler, Dallas, said commercial real estate specialists aren't facing a liquidity issue. "Capital is available," he commented. "We just don't like the price." About 6,100 real estate professionals are attending the three-day conference. That's down from 7,000 last year when ULI met in Las Vegas. But the sessions on capital markets were all standing room only.