Many economists are predicting that the U.S. economy will start into the next expansion by the third quarter of 2002 at the latest, and that real gross domestic product will be growing smartly by the end of 2002. Even if these predictions come true, I do not believe commercial real estate will move out of the current OVERBUILT PHASE of its three-phase real estate cycle until past the end of 2002. I believe the real estate cycle ended its preceding DEVELOPMENT BOOM PHASE, which began in early 1997, in about mid-2000, when it then entered the current OVERBUILT PHASE. But the typical OVERBUILT PHASE lasts until well after the general economy has begun expanding upwards from the bottom of a recession. Though such a general expansion raises demands for space, at first there is enough available supply left over from the preceding DEVELOPMENT BOOM so that rents do not rise enough to justify new development. This is the third or GRADUAL ABSORPTION PHASE of the real estate cycle. During this phase, rents rise and vacancies decline as the general economy grows, but little new construction begins. Eventually, rents rise high enough, and vacancies fall low enough, so developers start building new projects again in the next DEVELOPMENT BOOM PHASE. Every developer could be in a good spot if gets payday loans online. But that will certainly not occur in 2002 and probably not in 2003 either. True, the current OVERBUILT PHASE will not be nearly as long or as difficult as the one from 1990 through 1993, because existing space surpluses are much smaller than those in the early 1990s. But 2002 is sure to be a year of coping with rising vacancies and downward pressure on rents and property prices, at least in most office, industrial, and retail markets.