Tuesday, November 17, 2009
Sunday, November 15, 2009
Friday, November 13, 2009
From "Shopping Centers Today" - November 13th, 2009
Executives expect vacancies to remain highU.S. commercial real estate vacancies will continue to climb and rents to fall across property sectors before things bottom out next year, according to a survey of about 900 executives. Respondents said property values will decline 40 to 50 percent from their 2007 peaks. On a positive note for cash-rich investors, respondents also said that 2010 and 2011 will present opportunities to buy at or near cyclical lows.
“Our report participants find that a sense of nervous euphoria is growing among liquid investors who can make all-cash purchases,” said Stephen Blank, a senior resident fellow at the Urban Land Institute, which conducted the survey jointly with PricewaterhouseCoopers. “Those that are patient, daring and selective could score generational bargains on premium properties from both distressed sellers and banks that are clearing out unwanted bad loans and repossessed properties. However, once the property market recovery begins and gains traction, likely before 2012, any rebound could be restrained by a lackluster economy and rising interest rates.”
Capital will begin to flow back into commercial real estate by the end of 2010, respondents predicted, and the survey data indicate that investors think so too. The debt markets will also start to rebound, though they will be far from normalized in the wake of unprecedented de-leveraging, respondents said. Any lending will be conservative, expensive and available only to the most favored. REITs, private equity funds and even refashioned mortgage REITs will start to offer loans to eager borrowers, but at a steep price.
“For 2010 our report finds that investors will need to time the cycle, and only cash buyers will benefit from the emerging opportunities,” said Tim Conlon, a PricewaterhouseCoopers partner and U.S. real estate sector leader. “Investors will need to be patient, and transaction trigger points will be improving job numbers, visibility into asset pricing and stepped-up tenant deals. Equity investors will need to focus on quality assets and expect to hold for at least a five-to-seven-year period during the recovery, allowing fundamentals to slowly improve.”
“Our report participants find that a sense of nervous euphoria is growing among liquid investors who can make all-cash purchases,” said Stephen Blank, a senior resident fellow at the Urban Land Institute, which conducted the survey jointly with PricewaterhouseCoopers. “Those that are patient, daring and selective could score generational bargains on premium properties from both distressed sellers and banks that are clearing out unwanted bad loans and repossessed properties. However, once the property market recovery begins and gains traction, likely before 2012, any rebound could be restrained by a lackluster economy and rising interest rates.”
Capital will begin to flow back into commercial real estate by the end of 2010, respondents predicted, and the survey data indicate that investors think so too. The debt markets will also start to rebound, though they will be far from normalized in the wake of unprecedented de-leveraging, respondents said. Any lending will be conservative, expensive and available only to the most favored. REITs, private equity funds and even refashioned mortgage REITs will start to offer loans to eager borrowers, but at a steep price.
“For 2010 our report finds that investors will need to time the cycle, and only cash buyers will benefit from the emerging opportunities,” said Tim Conlon, a PricewaterhouseCoopers partner and U.S. real estate sector leader. “Investors will need to be patient, and transaction trigger points will be improving job numbers, visibility into asset pricing and stepped-up tenant deals. Equity investors will need to focus on quality assets and expect to hold for at least a five-to-seven-year period during the recovery, allowing fundamentals to slowly improve.”
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