CHICAGO -- U.S. commercial real estate developers, faced with declining opportunities at home, are looking to increased opportunities overseas, but some of the foreign markets are being filled by European and Japanese developers as they also reduce their activities in the United States.

"There will be large-scale opportunities in Europe in the 1990s, the first one being housing," Michel Sudarskis, secretary general of the Netherlands-based International Association for the Development and Management of New and Existing Towns, told the fall conference of the Urban Land Institute (ULI) here last week.

Central cities are being renewed and new business developments are being built around airports in all the second-tier cities across Europe, he said. However, he acknowledged that there currently is a surplus of office space in Western Europe.

"The potential for development has been moving from the Western European corridor to the Central European corridor to the Eastern European corridor down to Turkey," Sudarskis said.

Two of the three development partners at a major renewal project in Barcelona, which includes the $1.8 billion Olympic village for the 1992 Olympic Games, are U.S. companies, according to Josep Pons of the Barcelona Development Agency. Those partners are Kemper Insurance Companies and the Prime Group Inc., a Chicago-based commercial real estate developer.

The Prime Group is involved in other projects in Europe and major American cities, including an office building in Chicago that has been designed by Barcelona architect Riccardo Bofill.

For the Barcelona project, which is scheduled for completion in the year 2000, the U.S. architectural firms of I.M. Pei and Skidmore Owings & Merrill have designed some of the buildings, including an office building and a hotel, Pons added.

Texas developer Gerald Hines, who said his company has "been in the trenches with the banks" trying to solve U.S. development financing problems, said his firm has been looking for overseas development opportunities.

"It's not easy," he said. "It's different cultures. But it is a challenge and we're looking forward to challenges in the '90s."

Eastern Europe also presents "great opportunities for U.S. experience and skills," including partnership opportunities, said Mahlon Apgar IV, a principal with Apgar & Co., a Baltimore developer.

In real estate, the most critical need is for housing development, followed by retail centers, distribution centers, office buildings and incubator industrial space, he said.

"Western Europeans are our real competitors there and they are actively pursuing opportunities," Apgar said.

However, despite the opportunities in the Soviet Union and Eastern European countries, there are barriers to large-scale development: a lack of clear land titles, the necessary legal structure and consumer capital.

Such shortcomings can stymie development, no matter how strongly it might be needed, warned Paul Zane Pilzer, managing partner in Zane May Interests, Dallas, which is developing an office building in Prague.

"The business opportunities are not yet there to serve their citizens, but there are opportunities to serve Western visitors and Western companies," he said.

Czechoslovakia has the greatest overall opportunities for growth and is moving the fastest toward adopting the mechanisms needed for a Western property development and ownership system, Pilzer said.

"The Soviet Union," he said, "has some of the greatest opportunities for Americans." In Moscow, the projects that make most sense are hotels that earn Western currencies by serving Western companies, said Pilzer, who also lectures at Moscow University. With room rates in the $300- to $450-a-night range and occupancy levels close to 100 percent, the cost of constructing hotels can be covered within 12 to 18 months, he said.

To meet the "incredible need" for shopping centers in Eastern Europe, which lacks the land and legal infrastructure for their construction, Pilzer suggested building the centers right across the borders of Poland, Czechoslovakia and Hungary in Germany and Austria.

Central government power and control over development isn't ending only in Eastern Europe, according to other speakers at the ULI conference. It also is being reduced in Western Europe, providing more opportunities for North American developers with their private sector experiences.

"There is a need for more private sector participation in Western Europe," Sudarskis said. "The potential that Western Europe represents will attract non-European investments and interests."

With commercial real estate financing difficult obtain in their home markets, Sudarskis said that U.S. investors and developers "should be aware of the new opportunities in Western and Central Europe."

But while Japanese investors have already shifted much of their overseas real estate investments from the United States to Europe, including "posh projects in Paris and London," there still is little American presence in Europe, he noted.