Some commercial real estate brokers predicted an uptick in investment sales in the last half of this year, and despite the credit crunch and spate of gloomy news from Wall Street, it appears they were right.

Sales of office, retail and industrial property in Hillsborough, Pinellas and Pasco counties increased 435 percent in the third quarter to $242.6 million, up from a paltry $45.3 million in the previous quarter, reports Real Capital Analytics.

Not that 2008 will be remembered as a good year for the commercial real estate industry or economy.

Tampa Bay area third quarter sales fell far below the same period last year. And in the first nine months of this year, office, retail, hotel and industrial property sales were $540.2 million, down 80.5 percent from the $2.8 billion recorded in the same period last year.

But 2007 was no ho-hum year: Bay area commercial properties brought top prices amid brisk trading last year.

“Many of us had record years last year and so it’s particularly difficult to try to adjust to the scale of the collapse,” said Bob Abberger, Florida managing partner of Trammell Crow Co.

Said Cushman & Wakefield broker Mike Davis: “We went from absolute euphoria to depression.”

Sales aren’t bleak for everyone.

Davis and the three other members of his team are having a better year than 2007, he said. Davis is the real estate services firm’s No. 1 capital markets broker so far in 2008, based on sales volume. Cushman & Wakefield has 221 offices in 58 countries.

Market stabilization

Colliers Arnold President Pat Duffy said the market is adjusting to “what is probably a normal market.”

Elliott Ross, founder of The Ross Realty Group Inc. in St. Petersburg, agrees with Duffy, but Ross calls it a correction. “There was an artificial value being put on all real estate by what I call the funny money,” Ross said.

He’s referring to easy financing, such as interest-only loans that required little equity and no personal guarantee. Those loans haven’t been available for months.

Ross expects values to erode further before the market bottoms out.

Some strip shopping centers will sell for half of what they fetched at the market apex, said Ross, who contends some undeveloped residential land is already trading as low as 10 cents on the dollar.

Ross Realty Group sold a bank-owned land portfolio in October for $2.5 million, or 25 cents on the dollar. This month, Ross predicts it would have sold for half as much.

While deals are closing, Ross said, “There are just no buyers for silly deals.”

Calkain Cos. EVP David Sobelman agrees that deals priced right are closing, and about half are cash deals.

Deal volume isn’t expected to pick up until investors see prices stabilize.

Trammell Crow’s Abberger is hopeful that will occur no later than the second quarter of next year. “Institutional and corporate America is focused on taking their medicine now so that pain is minimized next year and we can be poised for recovery,” Abberger said.

Poised to buy

Locally and nationally, private equity funds are being set up to buy distressed properties.

jleiser@bizjournals.com | 813.342.2468