Now this is an interesting turn.

Commercial real estate leaders in Minnesota that their previous optimism (albeit, mild optimism) of 2010 and 2011 has slipped into "mild pessimism," according to a semi-annual poll conducted by the Shenehon Center for Real Estate at the University of St. Thomas.

The poll surveys 50 CRE leaders in the fields of development, finance and investment. The fall 2012 composite index was below 50 for the survey, which began in 2010.

According to St. Thomas, a score over 50 represents a more-optimistic view of things, while a score that dips below 50 hints of a pessimistic view.

The score for the fall of 2012 was 47, while the spring 2012 index was 49, continuing a downward trend since spring 2011, when the index was 56.

Herb Tousley, director of real estate programs at the university, said in a statement, “Our surveys conducted in 2010 and early 2011 indicated some mild optimism on the part of the panel with expectations of improving market conditions in 2012 and early 2013.”

Tousley noted that, "market conditions over the past year have demonstrated some improvement in most areas of commercial real estate which is consistent with those earlier survey results. . .We will know in about 18 months if the survey respondents’ change in enthusiasm was well-founded.”

The real estate experts indicated they are confident that rents and occupancy rates will grow in the next two years, although the pace of growth will likely be slower than expected.

But the anticipated increase in land prices and building materials will continue to have a negative affect on development, they said. Financing terms will likely remain stable and there should be "moderately increasing" amounts of equity capital available.

Still, "lenders and investors are going to continue to be very selective in their underwriting criteria and evaluation of potential deals," Tousley said.

Janet Moore covers commercial real estate for the Star Tribune.

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