U.S. ? (www.nuwireinvestor.com) The commercial real estate recovery, like the rest of the economy, had a late spring slowdown. ?We had a strong first quarter and a softer second quarter as investors became concerned about sovereign debt issues,? says Janice Stanton, senior managing director of Capital Markets for commercial real estate broker Cushman & Wakefield.
Commercial real estate brokers and researchers see a similar stall in momentum. The strongest activity is still confined to a few large cities, but large parts of the rest of the country are still working out the wreckage of the real estate crash.
?Momentum has tempered,? says Dan Fasulo, managing director for data firm Real Capital Analytics. ?We are not seeing the year-over-year gains that we were seeing last year.? Real estate investors traded $108 billion in properties in the first half of this year, according to Real Capital. The number is either up 6 percent, excluding transactions associated with mergers and acquisitions, or it was down 17 percent, including the boom in mergers and acquisitions last year. Either way, the market is no longer delivering clear, solid gains. Each quarter for more than a year, volume has stayed in the $50 to $60 billion range. Prices are still inching upwards for most property types, but slowly, according to Real Capital.
?Investment sales have rebounded to 2004 and 2005 levels,? says C&W?s Stanton. Investors still mainly concentrate on a few leading cities, though they are beginning to look further afield. ?Gateway cities led the recovery, but increasingly investors are looking to secondary markets for yield. The focus is either on durable cash flows in secondary markets, or secondary assets in primary markets,? she says.
Stanton is hopeful for the third quarter. ?The market has definitely picked up again,? she says. ?C&W?s investment sales pipeline is currently up about 30 percent on a year over year basis.? International buyers are helping. ?The U.S. has outperformed the global real estate investment markets,? she says. In contrast, global activity is down almost 20 percent on a year-over-year basis?
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Source: http://www.rednews.com/index.php/2012/08/commercial-property-investors-concerned/
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