{"id":1004035695,"date":"2012-01-11T13:15:25","date_gmt":"2012-01-11T21:15:25","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004035695"},"modified":"2022-12-02T23:00:05","modified_gmt":"2022-12-03T07:00:05","slug":"looking-forward-a-flat-economy-means-a-rising-cre-marketplace","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/looking-forward-a-flat-economy-means-a-rising-cre-marketplace\/","title":{"rendered":"Looking Forward: A Flat Economy Means a Rising CRE Marketplace"},"content":{"rendered":"

By Nicholas Ziegler, News Editor<\/strong><\/p>\n

The economy\u2019s recovery has been disappointing by many standards of measurement. We\u2019ve seen declines in median household income. As of November 2011, employment was up just 0.9 percent from its lowest level in the recent recession \u2013 which pales in comparison to a post-World War II historical average of a 6.8 percent decrease in unemployment 30 months after the end of recessions. And, amid all the European crises, Commercial Property Executive<\/em> reported today that the biggest problem isn\u2019t Greek debt; it\u2019s the possibility of default in Italy<\/a>.<\/p>\n

But there has been somewhat of a brightening: The 2 percent third-quarter growth in U.S. GDP hit just before a record holiday season, and a year-beginning prediction from services firm Jones Lang LaSalle said that total transaction volume in U.S. capital markets in 2012 could hit $160 billion.<\/p>\n

While that\u2019s not the same volume of growth as 2010 to 2011 \u2013 when transactions grew by 44 percent \u2013 it\u2019s still a significant improvement in the 15 to 20 percent range. \u201cThere is uncertainty out there, but give me a flat economy and I\u2019ll show you a rising CRE marketplace,\u201d Tom Fish, executive managing director and co-head of Jones Lang LaSalle\u2019s real estate investment banking unit told Commercial Property Executive. <\/em>\u201cCommercial real estate markets will continue to improve because of the relative yield they offer.\u201d<\/p>\n

Ian Goltra, a portfolio manager with Forward Management L.L.C., agrees.<\/p>\n

\u201cEven with weak U.S. job growth, the supply\/demand picture appears favorable on the commercial side, especially in the apartment and lodging sectors, while housing is still in the weeds,\u201d he said. \u201cMeanwhile, commercial properties are relatively inexpensive by historical standards.\u201d Goltra went on to note that, in 2011, private equity fundraising for direct-property purchases hit a new peak of more than $150 billion.<\/p>\n

A recent report by Maximus Advisors, a research and consulting firm, pointed out what many in the industry already know: That multi-family is going to continue to be the darling asset class for investors. With home ownership down 0.6 percent from one year ago \u2013 a shift of 700,000 owners into renters \u2013 \u201cthe transition from stage one of the recovery to stage two\u201d may be in the cards, the report noted. \u201cThe net result leaves the overall outlook for [the multi-family sector] in place: continued improvement in vacancies and healthy rent gains.\u201d<\/p>\n

But it won\u2019t only be the cultural shift from buying to renting; new apartment developments will fuel the trend as well. \u201cWe will start to see development capital pour into markets that can substantiate it,\u201d Fish said. \u201cEven capital that was focused on urban infill core will creep out to suburban areas because [investors] see potential.\u201d<\/p>\n

But the investment trend doesn\u2019t stop with multi-family \u2013 investors with a willingness to invest are flocking to core product in all sectors. For offices, investors will continue to be most interested in the top-tier markets this year.\u00a0In fact, market share for the office volume as a percentage of all investment in core gateway markets increased to 60 percent as of the third quarter, versus a longer-term average of 51 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"

Commercial real estate markets will continue to improve in 2012 because of the relative yield they offer. With a flat economy comes a rising CRE marketplace. <\/p>\n","protected":false},"author":1201,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004035695","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nLooking Forward: A Flat Economy Means a Rising CRE Marketplace - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/looking-forward-a-flat-economy-means-a-rising-cre-marketplace\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Looking Forward: A Flat Economy Means a Rising CRE Marketplace\" \/>\n<meta property=\"og:description\" content=\"Commercial real estate markets will continue to improve in 2012 because of the relative yield they offer. 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