Commercial mortgage market to bottom out in 2011

While the national economy appears on its way to recovery, a recent report finds that it may take the commercial real estate market another year to turn around.

A study by Prudential Real Estate Investors says that the commercial mortgage market will hit bottom this year with $2.9 trillion in lending, and then begin rising in 2012 to reach $3.3 trillion by 2015.

"The availability of debt is a critical element of the commercial real estate market," said Jack Taylor, managing director at PREI. "As commercial mortgage volume nears the bottom of the current cycle, we will begin to see activity pick up."

Despite the struggles in the market, a number of recent reports have said that for the time being, trophy properties in the Houston real estate market and other select cities will continue to drive the market in the coming months.

As lending in the market continues to stabilize, prices have already begun to rise. A report from Moody's Analytics earlier this month found that commercial property prices in the U.S. grew 0.6 percent in November - the third consecutive monthly gain.