Commercial real estate 'faces worst year'

NEW YORK, Nov. 5 (UPI) -- Corporate downsizing has not only led to layoffs, but to downsizing of office space, cutting into the U.S. commercial real estate business, observers said.

A recent trade report by PriceWaterhouseCoopers and the Urban Land Institute said, "U.S. commercial real estate faces its worst year since the wrenching 1991-1992 industry depression," The Washington Post reported Wednesday.

Vacated this year are 19 million square feet of commercial real estate space, the Post reported. In terms of sales, the record of $514 billion set in 2007 may be cut in half this year, Real Capital Analytics of New York said.

More than $14.5 billion in U.S. commercial real estate deals have been canceled this year, the Post reported.

"This is a record-setter because it transcends real estate," John Germano, managing director at CB Richard Ellis, told the Post.

"You've seen companies that real estate depends on like Merrill Lynch, Lehman either be retrenched, sold or go under," he said.