Commercial Real Estate Revival

Happy Weekend Everyone!  Thank you all for reading my Blog…the feedback has been great….let’s start the weekend with one of my favorite quotes.

Henry David Thoreau:

None are so old as those who have outlived enthusiasm.

As we read the various reports that cover The Commercial/Industrial Real Estate sector….we see that there is a steady increase in activity that should ramp up as we move further into 2010/2011. I have added to today’s blog a very interesting  status report from Cushman & Wakefield that  clarifies the Commercial Real Estate Global Market.

According to Cushman & Wakefield’s 2010 Global Investment Atlas which monitors investment flows in commercial property in 56 countries, global investment volumes are forecast to rise 30% this year, hitting $478 bln. (€362 bln.), led by a reviving US market. The new report launched in March, suggests that this figure is likely to be even higher if the economic recovery remains on track. In 2009, global investment volumes fell 23% to $365 bln. (€270 bln.), their lowest since 2003. However as markets started to recover and global liquidity improved, investment volumes ended the year on a much stronger note – rising 104% between the first and second halves of the year.

Janice Stanton, senior managing director of capital markets, Cushman & Wakefield in US comments, “The debt overhang and “job-free” recovery mean that other than for the best assets, downward pressure remains on prices. However, this may create attractive buying opportunities in the second half as distress and refinancing needs emerge on the market. With many investors sat on a lot of cash after the recapitalisations, equity raises and inward investment flows of last year, a strong turnaround in activity looks likely. Indeed, if the economy stays on track, it wouldn’t be surprising to see our forecast beaten”.  According to Frank Liantonio, executive vice president, Cushman & Wakefield: “The US market remains a Tale of Two Cities, divided between institutional sellers, who were on the sidelines in 2009,  and distressed sellers (special servicers and bank REO groups),  who have been reluctant to bring product to market and lock in losses.  As 2010 unfolds activity in both sectors should improve as pricing for well leased, core product purchased before the market peak benefits from large pools of frustrated capital, and distressed sellers begin to deal with a mounting volume of properties.”

Enjoy the weekend!