US Investors Look to Increase Sales

An increase in the number of foreclosed commercial real estate units will lead to an increase in sales in the US property market next year, investors have claimed. The Emerging Trends in Real Estate 2011 survey found that activity is likely to increase as buyers take advantage of low prices....

An increase in the number of foreclosed commercial real estate units will lead to an increase in sales in the US property market next year, investors have claimed. The Emerging Trends in Real Estate 2011 survey found that activity is likely to increase as buyers take advantage of low prices.

However, commercial property investors in the country remain wary of the fragile economic recovery and will also continue to buy into high quality buildings whose rents will help to cover costs, Reuters reported the study as finding.

Survey respondents and those interviewed expect equity returns for stable properties to be about 7.5 per cent for private institutional investors and 8.2 per cent for real estate investment trusts. For riskier property investments, returns were seen in the mid teens. But any recovery in the real estate market would be lost if there was a further downturn in the US economy.

"There's tremendous continued anxiety over whether or not we'll see a double dip (recession). If we see a double dip in the macro economy it's liable to have an impact on the real estate economy," said Mitchell Roschelle, PricewaterhouseCoopers partner. "Even if we don't see a double dip, the profound belief was the economy, no matter how long it takes, will be jobless for some time."

- Friday 15 October 2010

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