CANNES, France, March 13 (Reuters) - Goldman Sachs Asset

Management will resume "actively investing" in U.S. commercial

real estate this year because the market is bottoming out, the

co-head of its real estate business said on Wednesday.

Prices of U.S. offices and other commercial properties such

as multi-family apartment blocks have fallen sharply in the face

of higher interest rates and for vacancy rates for offices that

have soared far more than elsewhere since the pandemic.

The plunge in prices has rattled confidence in U.S.

regional banks with large exposure. Investors gathered in Cannes

this week for a property conference said the office sector could

struggle to recover, with a Brookfield Asset Management ( BAM )

executive calling the U.S. the world's most

oversupplied market

.

Jim Garman, GSAM's co-head of real estate, said he saw a

buying opportunity.

"The reason is a combination of interest rates coming down,

we feel like the market is bottoming out, and because we're

starting to see a floor in prices set by buyers who are in the

market," Garman told Reuters in an interview at the MIPIM

conference.

Garman said GSAM, the asset management arm of Goldman Sachs ( GS )

, had begun to deploy more cash in real estate in Europe

and Japan over the past three months, without quantifying its

investment.

The underlying strength of the U.S. economy should support a

rebound in the U.S. market too, although he cautioned about the

speed of a recovery.

"We don't think its going to be a very sharp V-shaped

recovery - we think we're going to bump along the bottom for a

while, as a lot of these over-levered situations in the asset

class get worked through," he said.

Today's property market downturn is not like the 2008-09

global financial crisis, in part because banks are in better

shape and "have the capital cushion to take action", Richard

Spencer, managing director in GSAM's Real Estate Principal

Investments Area, said in Cannes.

"We're expecting an extended period of deleveraging,

rather than a blanket 'extend and pretend' approach or blanket

resolutions by lenders. It's just going to take time to

resolve," he said.

The need to green building has also set off a "capital

expenditure supercycle relating to sustainability", Spencer

added.