Jul
17

Making Sense of the Real Estate Market

By
This is an excellent article written by my good friend, and Integra partner, Tony Graziano.

MBD

Investors who know where to look can find opportunities

By Anthony M. Graziano, CRE, FRICS

While commercial real estate is more than ever intrinsically linked to the capital markets, the fundamental outlook for its stability and long-term success remains healthy for the balance of 2008. Escalating construction costs, specifically for materials such as wood, steel, and oil, have hampered overbuilding in most domestic markets. These input costs are not expected to decline, which constrains the market’s tendency to overbuild. Escalating land prices and expectations of future land and development demand clearly have cooled, and commercial land values will be re-benchmarked well into 2010 in all markets where vacant land is plentiful. For most asset classes, continued strength in occupancies, rent levels, and demand appear to be in balance in most markets.

So why does everyone feel so badly about this year’s commercial real estate prospects?

Fear Factors
A survey of industry experts and analysts point to four current trends that are affecting lenders, investors, brokers, and owners in the commercial sector:

– general economic malaise;
– investors’ wait-and-see attitude;
– lack of available capital; and
– buyer-seller price disconnect.

However, these four trends affect the trading of real estate, not the underlying supply/demand fundamentals of the commercial sector. But how each of these factors develops through the balance of 2008 frames the midyear forecast.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:

http://www.ciremagazine.com/article.php?article_id=1251
Be Sociable, Share!
    Categories : National News

    Comments are closed.