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We recently updated our market sentiment survey for Q3. Over 2,000 LoopNet members responded with their predictions of where the market is heading. Here is what they said:

Timing
Investor sentiment regarding the timing of a recovery in sales transactions has slipped since our last survey in Q2. Only 10% of respondents are expecting to see a recovery in 2009, vs. 33% in our last survey. In addition, the number expecting a recovery to wait until 2011 has increased from 25% to 33%.

Looking on the bright side, however, the number of respondents predicting the market will recover in 2010 has increased from 42% to 56%, with expectations for a Q2-Q3 uptick.

There is general agreement on the timing of an increase in transaction volume across brokers, investors and owners, although slightly more investors expect an increase to wait until 2011. Relative to the earlier survey, however, the owners have had the most significant tempering of expectations. In the Q2 survey, 44% of owners anticipated a recovery in transaction volumes in 2009, which was far higher than the percentage of brokers or investors. In the current survey, the percentage of owners anticipating a 2009 recovery has fallen to 10%, much more in line with the other two segments.

                                 Breakdown by quarter and by role

Pricing
The relative consistency on the timing of the rebound in transaction volume across the different roles does not carry over into expectations about future price declines, suggesting there is still a difference in expectations between buyers and sellers.

Overall, respondents are expecting significant further declines in price, with 11-20% being the most prevalent prediction and about 20% expecting declines of 20% or more.

When split by role, however, owners are more optimistic than investors. Among owners, 28% believe that pricing has bottomed out already or will decline by 5% or less. This compares to only 19% of investors. The reverse holds true at the other end of the pricing spectrum, with 28% of investors expecting declines of above 20%, whereas only 19% of owners are that pessimistic. Brokers lie in the middle between the two, with 18% expecting 0-5% declines and 19% predicting greater than 20% declines.

When will prices hit bottom?
There was no clear consensus on when pricing will hit its lowest level, although the majority (60%) does expect it to occur between Q4 of ’09 and Q3 of 2010, with a slight bias toward the first half of this time period. Very few respondents believe that we have seen the end of price declines. A substantial number (17%) are expecting to continue to see declines through 2011.

More owners believe we have already hit the bottom than do brokers or investors, but the differences overall are not as pronounced as on the size of the expected declines. 55% of owners expect prices to reach their lows in the Q4 09 to Q3 10 timeframe vs. 57% of investors and 63% of brokers.

Sector
Multifamily was the overwhelming favorite for presenting the best opportunities for long term investments in the current cycle. This held true across all three major segments—brokers, investors and owners.

Overall
While the expectations for an increase in transaction volumes have shifted later than in our Q2 survey, the shift appears to be driven more by pessimism about 2009 than a long term reassessment. A solid majority of 56% now believe that 2010 will see an uptick in volume, and increase of 14 points from Q2. There is, however, a significant contingent that does not expect recovery until 2011.

Prices will fall further, and there is still a difference in expectations between sellers and buyers of commercial property. This, combined with the lack of consensus on when prices will reach their lows, could prove to be an obstacle to a return in transaction volumes, and will hopefully be worked out over the next quarter.

Twitter just released "Twitter 101" for businesses. Worth a read: http://business.twitter.com/twitter101

Twitter is a communications platform that helps businesses and their customers do a number of useful things. As a business, you can use it to quickly share information with people interested in your company, gather real-time market intelligence and feedback, and build relationships with customers, partners and other people who care about your company. As an individual user, you can use Twitter to tell a company (or anyone else) that you've had a great--or disappointing--experience with their business, offer product ideas, and learn about great offers.

Last quarter, over 2/3 of LoopNet members expected a recovery in commercial real estate sales transactions to wait until 2010 or later. How have expectations changed since then? When will the market bounce back? Do prices need to fall further? Tell us what you think. Take the poll and see the results!

Real estate marketing, be it at the corporate, property or personal level, has always relied heavily on relationships.

As we know, people do business with people they like, know, trust and can rely on for good information. The surging popularity of social media sites such as Facebook, LinkedIn and Twitter (which have seen their traffic increase between 100% and 1000% over the past year) can be explained largely by the effectiveness with which some people are using them to develop and enhance relationships.

At LoopNet, we have observed a significant and meaningful expansion of social media usage among our members, who are typically very technology savvy. 64% of them believe that online networking with other professionals is critical to long-term career success. 39% have a Facebook account, 31% have a LinkedIn account and 11% have a Twitter account.

Brad Nix, a LoopNet Member based in North Atlanta, is a broker and co-owner of Maxsell Real Estate (www.Maxsell.net) and co-founder of REtechSouth.

He observes that these Web sites provide an incredible opportunity to do “real-world networking without having to get dressed up … an opportunity to grow your sphere of influence, including with existing relationships, and add value to others in the networks.”

On Facebook, he advises, real estate professionals might benefit from starting neighborhood pages in their markets to attract visitors with local interest who are willing to contribute content. Or real estate pros can establish company pages (separate from personal profiles) to explicitly promote their businesses and services. Property listings could be posted on company pages; your “Friends” would naturally discover your listings through the link between your personal and company pages.

He also suggests setting up automated alerts and conducting periodic content searches of social networking sites in the interest of gleaning bits of information that could be valuable, such as about a local company contemplating a relocation.

From Nix and other leaders in this space, these conclusions about social media can be drawn:

• It’s about sharing, not selling. In other words, networking in the interest of developing and strengthening relationships with people who either might be customers one day or could refer someone they know to you or your firm.

• It’s typically about quality, not quantity. To the extent relationships nurtured online produce business leads, they may be fewer but they should be better-quality. That said, there is a multiplier effect with these sites; heavy-duty use of social networks could produce a high quantity of leads over time.

• It’s about information. People sometimes say things online in their blogs or Tweets before it’s officially known to a broader audience. To the extent you are part of someone’s network, you may learn valuable information.

Recognizing the growth in this area, and in the interest of helping our members expand their reach, LoopNet recently launched a new tool allowing members to post listings to online social networks. Through the “Property Profile” page of each LoopNet listing, visitors can choose to propagate listings to Facebook, LinkedIn or Twitter.

This allows LoopNet members to take full advantage of the power of their personal networks, either to solicit feedback or insight on properties they are thinking of buying or leasing, or for identifying potential buyers or tenants for properties they are marketing. Think about these networks as a Rolodex on steroids.

So here we are 14 years after the launch of LoopNet, itself an Internet pioneer, integrating new media with even newer media in the interest of driving commercial real estate professionals’ success through relationship-building. What’s next?

This post was originally published in CPN's Tech Talk

Send clients straight to your listings with your personal web page! Your web page displays your listings — and only your listings — with a personalized URL.

To get your personalized URL, go to My Listings and find the link at the top of your listings. Click on the screenshot on the right to see where the link is located.

Here is an example: http://www.loopnet.com/profile/16352110941/Jeffrey-Thomas/

Make your web page available to clients by posting it on your website, in your email signature, on business cards and on property flyers! Best of all, anyone can access your web page, no registration required!

The next time you add a commercial property listing on LoopNet, check out the new "Distressed" and "Auction" flags we added:

If you are marketing any of these types of properties, add this flag to get the right exposure for your listings.

You can also limit your search to distressed properties or property auctions via the search commercial properties for sale page:



We're getting more and more of these properties every day so set up an email alert for distressed or auction properties to be among the first to know when these types of deals come on the market.

I have noticed in many broker's proformas, when calculating cash-on-cash yield, NOI minus debt service, often times "principal reduction" is added back in to the equation. However, this is misleading because principal payments are not "real" cash available to distribute to investors. Why is this method used? - David T.

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