WASHINGTON, D.C. - A severe lack of credit threatens commercial real estate and poses significant risks for the whole economy, according to a National Association of Realtors work group.

Organized by NAR’s Realtors Commercial Alliance, the Commercial Economic Stimulus Work Group has developed a plan to address high-priority issues like lack of credit to avoid further losses in the commercial real estate markets and identify strategies in alignment with other real estate stimulus activities as a part of the national economic recovery plan.

“Most lenders have withdrawn from the market and there is no secondary market for commercial mortgages,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “If lenders cannot meet the growing demand for credit to refinance performing commercial real estate loans which are due to mature soon, a wave of defaults could worsen the current credit crisis. Policymakers must act swiftly to enact measures to restore credit capacity.”

Commercial real estate plays a vital role in the national economy. Income-producing commercial property is valued at approximately $5 trillion. The commercial sector provides more than 9 million jobs and generates millions of dollars in federal, regional, and local tax revenue. Local governments, in particular, depend on this revenue for roughly 70 cents out of every dollar in local government budgets. Tax revenues from commercial real estate provide vital public services including education, road construction, law enforcement and emergency planning and response.

“Commercial real estate creates the framework for much of what happens in our economy,” said Robert Toothaker, RCA chairman. “A major collapse in this area would be felt throughout the economy.”

SAN FRANCISCO  – With some regional variation, U.S. residential and non-residential construction activity is expected to remain weak through most of the coming year, according to the 2009 Wells Fargo Construction Industry Forecast. Survey respondents were slightly less pessimistic about non-residential construction activity.

In its 33rd edition, the Forecast – published by Wells Fargo Construction, a division of Wells Fargo Equipment Finance, Inc. – is based on telephone interviews with more than 900 executives of construction contracting and equipment distribution companies from around the country. Surveys for this year’s Forecast were conducted during a six-week period in October and early November 2008, at a time of particularly heightened economic uncertainty.

“We took the pulse of the industry during a period of unprecedented turmoil, and that certainly influences the numbers we are seeing,” said Ron Riecks, general manager for Wells Fargo Construction. “There is no doubt that there are serious economic issues yet to be faced, yet construction is a cyclical industry. We’ve been down before, and we’re confident the construction industry will rebound. 2009 is going to be a difficult year yet a government stimulus package with an infrastructure revitalization component could go a long way to helping this industry recover before the end of the year.”

The Forecast once again highlights that construction is a regional industry.  The Mountain Region (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming) had the largest share of contractors (43 percent) and distributors (48 percent) who anticipate non-residential construction activity levels will stay the same in 2009. Mountain Region contractors also have the most ambitious equipment-acquisition plans. More than one-third (34 percent) say they will purchase new equipment, well above the 20 percent national average.