Expect one or two quarters of “sharp declines” in the commercial real estate market before the situation levels off or begins to improve. That was the message from Andy Warren, managing director for research at Principal Real Estate Investors, as he addressed the Business Record’s annual Commercial Real Estate Trends and Issues Forum this morning.

“There are signs in the economy that we’re near the bottom,” Warren said, “but real estate lags other segments by one or two quarters. … It could be late 2010 before we see the markets pushing up.”

Two Iowa State University experts also spoke to the crowd at the Courtyard by Marriott in Ankeny: economics professor Peter Orazem and Extension Program Specialist Meghan O’Brien.

O’Brien said she’s skeptical about the idea that “pent-up demand” will result in a frenzy of retail activity when the economy turns around. “I think it will be a more gradual process as consumers reacquaint themselves with the market,” she said.

Orazem noted that securitization, which receives so much blame for the current economic mess, actually has “immense value” when done properly. He advanced the idea that insurance companies might act as financial intermediaries in a redesigned system of securitization.