Commercial real estate market bottoming out?

Still, 2010 will be a good year for rental rates for tenants amid a continuing glut of office space, according to commercial real estate services firm Jones Lang LaSalle.

Warnings about a commercial real estate loan bubble that could burst as billions of dollars of debt matures this year and next year have left many investors in a “wait and see” position, the company said in its Atlanta Urban Skyline Review released Tuesday. But with many banks and other lenders in trouble, investors are more likely to renegotiate and restructure loans rather than foreclose, the company said.

The Skyline Review analyzes 53 high-profile office buildings in downtown Atlanta, Midtown and Buckhead,  including 191 Peachtree,  SunTrust Plaza, Bank of America Plaza and the big Buckhead office towers.

As new office space continues to outpace demand, the vacancy rate in those submarkets is closing in on 25 percent, the report said.

“Investment activity is likely to remain slow in Atlanta until market fundamentals show sustained growth and confidence returns to the commercial real estate market and overall economy,” Lanie Rea, research manager of Jones Lang LaSalle in Atlanta, said in the report. “So while the commercial real estate market may have bottomed in urban Atlanta, all indications point to a slow and cautious ride back to the top.”

Has the bubble burst,  experts were asked  at the company's Atlanta real estate forecast breakfast on Tuesday.

“We're hoping it's a slow leak,” said Thomas Coakley, regional director of real estate investments for MetLife. “As long as everybody does their part,  and there's no unforeseen occurrences ... we don't see anything that will cause an explosion.”

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