Sam Zell, billionaire and commercial real estate maven, is predicting that commercial real estate is coming back, albeit slowly as the credit market is loosening up. The city center is the strongest market and there is great risk in the “ex-urban, the glass-block commodity office building” sector.

Overall though Zell seems very bullish on the market and with his track record I would pay attention.

“I believe the overall market has already started to ease,’ Zell, chairman of Equity Residential, the largest U.S. apartment owner, said in an interview in New York. “Is it in large volumes? No. Is it the first natural step in the evolution? Yes.’
For the first time since July, when credit markets froze in reaction to rising home-loan defaults, investors are starting to move their money from Treasury bonds, whose returns are below the inflation rate, and into commercial mortgage-backed securities. Insurance companies and pension funds need to earn at least 6 percent to cover their liabilities, Zell said