Submitted by Naomi M on Thu, 10/18/2007 - 16:25.
Commercial real estate headed for correction
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A survey by the Urban Land Institute and PricewaterhouseCoopers, reveals the U.S. commercial real estate market will slow in 2008 but still outperform returns on both U.S. stocks and bonds.
A “healthy correction” is ahead for the commercial real estate market “that will likely bypass long-term investors but penalize late-to-the-game speculators and overleveraged buyers,” according to a news release about the survey.
Those investors that will not fair well from the correction include Hedge funds, flip artists and financial engineers, according to the survey. “Investors ‘with dry powder’ and low-leverage investors, particularly pension funds and REITs, could be well positioned.”
Respondents believe the commercial market correction will not be as bad as that in the residential market, the release said. “Coastal gateways” such as New York, Seattle and West Los Angeles will continue to attract business and investments at the expense of other cities and regions even as demand ebbs elsewhere.
This year’s survey was the first to also address Canada, where investors hope to sidestep any serious effects of a U.S. correction. “Canada benefits from a more conservative investment environment than the United States, avoiding consequences of lax underwriting,” the survey said. “Western provinces showcase the strongest growth trends and lowest vacancies in North America.”
Source: http://www.pionline.com/apps/pbcs.dll/article?AID=/20071017/DAILY/71017018
A “healthy correction” is ahead for the commercial real estate market “that will likely bypass long-term investors but penalize late-to-the-game speculators and overleveraged buyers,” according to a news release about the survey.
Those investors that will not fair well from the correction include Hedge funds, flip artists and financial engineers, according to the survey. “Investors ‘with dry powder’ and low-leverage investors, particularly pension funds and REITs, could be well positioned.”
Respondents believe the commercial market correction will not be as bad as that in the residential market, the release said. “Coastal gateways” such as New York, Seattle and West Los Angeles will continue to attract business and investments at the expense of other cities and regions even as demand ebbs elsewhere.
This year’s survey was the first to also address Canada, where investors hope to sidestep any serious effects of a U.S. correction. “Canada benefits from a more conservative investment environment than the United States, avoiding consequences of lax underwriting,” the survey said. “Western provinces showcase the strongest growth trends and lowest vacancies in North America.”
Source: http://www.pionline.com/apps/pbcs.dll/article?AID=/20071017/DAILY/71017018
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