US commercial property boom decades away - report

* Commercial property sales to take a generation to return

* Second quarter 2009 sales lowest on record

NEW YORK, Sept 2 (Reuters) - The level of U.S. commercial
real estate deals seen in the boom years of 2005 through 2007
may take a generation to return, according to a report by real
estate services company Jones Lang LaSalle Inc (JLL.N).

U.S. commercial real estate sales in the first half of 2009
totaled $16 billion, down 80 percent from the same period a
year earlier and off 93 percent from the market peak of $231.4
billion in the first half of 2007, according to the firm's U.S.
Mid-Year Capital Markets bulletin, released on Wednesday.

At $5.2 billion, second-quarter sales were easily the
lowest on record, down from $30.7 billion in the year-earlier
quarter and off 95 percent from $114.7 billion in the second
quarter 2007.

From the peak of the market to the end of the second
quarter 2009, U.S. office asking rents fell on average 10 to 25
percent. Office leasing is down 25 to 50 percent. Commercial
real estate prices are off 30 to 55 percent, according to the
report.

The credit crisis, which accelerated at the end of last
year, essentially shut down mortgage lending and other loans
critical for real estate sales and refinancing. Although
lending to selected borrowers has resumed somewhat, the U.S.
recession has pounded rents and occupancy rates.

"It is unlikely that any true debt liquidity will return to
the market until mid-2010 at the earliest," Kenneth Rudy,
president of Jones Lang LaSalle's Capital Markets practice,
said in a statement.

Meanwhile, first-year yields on the building purchases have
moved up 2.5 percentage points. The yield, also called a cap
rate, moves inversely to the price, and a 2.5 percent cap rate
rise could knock a third off prices.

Prices for office buildings are not expected to begin to
recover until at least 2012 because commercial real estate
performance, which is based on job growth, lags the economy.
The retail and lodging markets also will need additional time
to recover as they depend on consumer spending and business
travel.

Jones Lang LaSalle predicts that U.S. investors will slowly
begin to return to the market by mid-2010, though a return to
the boom years of 2005 through 2007 will take a generation or
longer.

Instead of $231 billion a year in deals, U.S. commercial
real estate sales are likely to hover around $100 million on
average for the first several years of the next decade.
(Reporting by Ilaina Jonas, editing by Matthew Lewis)