RCA in the commercial property press:

Look Out Below: Property Still in Sewer

Barron's reports: Worldwide commercial property sales volume fell off a cliff in the first three months, plunging to one-sixth its level of two years ago (and down 73% from 2008's first quarter) to a paltry $47 billion, according to Real Capital Analytics' quarterly Global Capital Trends report. In the U.S., there was barely $9 billion in commercial property transactions, a sum that might have represented a single building a few short years ago.

"The commercial-sales market as we once knew it is basically nonexistent," says Dan Fasulo, a managing director at Real Capital and one of the authors of the report. The bid-ask spread is "as wide as it has been since the early '90s," he adds.

In the first quarter, new reports of defaulted mortgages and failed commercial-property companies exceeded $55 billion, bringing the total of distressed assets to $153 billion.

The misery was widely distributed: Ireland saw a complete absence of sales, while 17 nations saw sales fall by 80% or more in the quarter versus 2008's first quarter. Meanwhile, price changes varied from small gains to declines of 40 to 50 percent below those of a few years ago.

Fasulo isn't too sanguine about prospects for improvement in the current quarter, although he notes that "we've seen a trickle of things picking up just over the past few weeks." He points to places like London and Paris, where markets have seen pricing beginning to correct.

To get the market back on track, says Fasulo, the distressed properties need to be cleared out, and the banks, some of which are lending, need to be more generous with their terms.