Despite a still-struggling U.S. economy, ill credit markets, deteriorating property fundamentals, and precipitous declines in commercial real estate values, most equity investors have remained on the sidelines waiting to capitalize on forced sales and more motivated selling on the part of distressed owners, according to a new study.

The 2009 third quarter findings of PricewaterhouseCoopers’ Korpacz Real Estate Investor Survey found investors anticipate near-term defaults combined with looming due dates on CMBS (commercial mortgage backed securities) maturities to jump-start distressed buying opportunities during the next year.

So far, the de-leveraging of the commercial real estate industry has disappointed many investors who have been waiting patiently to acquire quality, stable assets at distressed pricing, according to the study.

"Investors seem surprised at the lack of quality buying opportunities given the problems in the financial markets and the continued weakening of the industry’s fundamentals," said Susan Smith, director of real estate advisory practice at PricewaterhouseCoopers, and editor-in-chief of the survey. "Some investors sense that near-term defaults with commercial banks will allow them to acquire quality assets at steep discounts, as banks may no longer be able to continue to ‘pretend and extend’ troubled loans and would be forced to place assets up for sale."

Locally, investors expect market rent to decline up to 10 percent in Boston. Near-term market rent declines are predicted to be up to 20 percent in Manhattan, San Francisco and Phoenix, according to the study.

Market rent is expected to remain relatively flat for the office markets of Dallas, northern Virginia and Pacific Northwest.

The survey found the majority of the commercial real estate industry is expected to remain in recession through 2011. While an industry-wide recovery is not expected to begin until 2012, the pace of the recovery will vary for each property sector, as well as across individual geographies.