{"id":1004035956,"date":"2012-01-24T06:08:02","date_gmt":"2012-01-24T14:08:02","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004035956"},"modified":"2022-12-06T08:33:10","modified_gmt":"2022-12-06T16:33:10","slug":"cbre-global-outlook-for-cre-remains-cloudy-in-12","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cbre-global-outlook-for-cre-remains-cloudy-in-12\/","title":{"rendered":"CBRE: Global Outlook for CRE Remains Cloudy in '12"},"content":{"rendered":"

January 24, 2012<\/strong>
\nBy Nicholas Ziegler, News Editor<\/em>
\n

\"\"<\/a>

Image courtesy Flickr user michaelwm25<\/p><\/div><\/p>\n

With the successes \u2013 and challenges \u2013 of 2011 behind us, their legacies live on. Many of those factors will continue to haunt the market in 2012. With the uncertainty in global markets, investors had a lower tolerance for risk. The safest real estate assets \u2013 the flight to quality, seeking prime properties in prime locations \u2013 saw the lion\u2019s share of the activity in 2011 but it may be difficult to continue that same level of activity in the new year.<\/p>\n

According to a year-end report by CBRE Group Inc., there are a few steps that must be taken for the global real estate markets to restabilize and to continue trending upward. First, \u201cWestern economies need to manage their government budgets and lower their debt profiles,\u201d the report stated. Fiscal vitality is measured in a debt-to-GDP ratio \u2013 so not only do debts need to be reduced, but policies need to be put in place that will stimulate private economic growth. But many Euro-zone countries are stuck in a cycle that equates austerity measures to lessened growth, which makes deficit reduction more difficult.<\/p>\n

Domestically, the U.S. is facing an election year that will likely not support solutions to looming economic crises. While the Fed has maintained that interest rates will remain low through 2013, allowing the possibility of faster growth, a comprehensive policy to curtail debt burden is still far off. And those low interest rates could prove to be a problem long-term, as \u201cby the end of 2012 we will still be looking at zero or near-zero interest rates, as the monetary authorities provide the liquidity to keep deferring the problem\u201d of a possible series of disorderly defaults.<\/p>\n

So, in the CRE realm, the implications could be long-reaching. After three years of below-trend growth, the market is measured in extremes: Core locations in prime markets were investors\u2019 dreams in 2011, but secondary and tertiary markets didn\u2019t perform on the same level. Commercial real estate remains, however, one of the safest asset classes as it generally showed solid returns and provided good diversification for multi-asset portfolios.<\/p>\n

A continued slowdown in growth will likely impede the recovery of CRE fundamentals well into the new year, but that hampering could be tempered by the lack of new supply facing many markets. Brazil, China and India all have occupier demand that outstrips supply, which will create upward pressure on rents, but, CBRE found \u201calmost all the data and anecdotes we come across suggest that corporate occupiers will continue to face a challenging operating environment in 2012 and will be cautious in their expansion\/renewal plans.\u201d<\/p>\n

Availability of debt finance for real estate in Western markets looks set to remain tight, and appears to be getting tighter in Europe. Lending will remain selective. Banks seeking to reduce existing real estate exposure face a protracted workout of loan portfolios, although pressures to achieve disposals and recycle capital are increasing. Sales of loan portfolios are likely to be completed at prices below the peak but higher than a few years ago. Some new lenders will become more active in the market\u2014notably, insurance companies in Europe.<\/p>\n

\u201cValue-add strategies,\u201d the report noted, \u201care more directly dependent on the economy\u2019s growth or recovery, and are therefore likely to be less popular in this environment. As a result, secondary property will continue to underperform.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

According to a year-end report by CBRE Group, the safest real estate assets \u2013- prime properties in prime locations -\u2013 saw the lion\u2019s share of the activity in 2011, but it may be difficult to continue that same level of activity in the new year. <\/p>\n","protected":false},"author":1201,"featured_media":1004038607,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21781,21808,21783,21742,21747],"tags":[],"class_list":["post-1004035956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-real-estate","category-featured","category-investment","category-latest","category-office"],"acf":[],"yoast_head":"\nCBRE: Global Outlook for CRE Remains Cloudy in '12 - 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\/cbre-global-outlook-for-cre-remains-cloudy-in-12\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CBRE: Global Outlook for CRE Remains Cloudy in '12\" \/>\n<meta property=\"og:description\" content=\"According to a year-end report by CBRE Group, the safest real estate assets \u2013- prime properties in prime locations -\u2013 saw the lion\u2019s share of the activity in 2011, but it may be difficult to continue that same level of activity in the new year.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/cbre-global-outlook-for-cre-remains-cloudy-in-12\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2012-01-24T14:08:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-06T16:33:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2012\/01\/012412-Philly-Cloud-Skyline-CBRE-Outlook-user-michaelwm25.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"640\" \/>\n\t<meta property=\"og:image:height\" content=\"441\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Nicholas Ziegler\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cbre-global-outlook-for-cre-remains-cloudy-in-12\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/cbre-global-outlook-for-cre-remains-cloudy-in-12\/\",\"name\":\"CBRE: Global Outlook for CRE Remains Cloudy in '12 - 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