On Thursday, I bumped into commercial real estate investor in the Denver's Larimer Square Starbucks and we had a brief conversation on the state of the RE market. his firm had just purchased a building from Opus, and the building is 80% leased. He said that the last 20% is where all the profit comes from.

In relation to the commercial property investment opportunities, he said that the real deals will start to happen in 2010. The current Landlords need to experience some discomfort before the cost per square foot decreases and the cap rates increase.

Commercial lease rates will probably adjust downward 6-12 months prior to the reduction in sales prices. From a Tenant's perspective, this means there will be good leasing opportunities in Q2 or Q3 2009.