Is US Commercial Real Estate On The Up?

There are indications that a rebound in commercial real estate markets in the US is happening, a group of experts has revealed. A letter written by the Federal Reserve Bank...

There are indications that a rebound in commercial real estate markets in the US is happening, a group of experts has revealed. A letter written by the Federal Reserve Bank of San Francisco pointed out that there is contradictory information over the state of the sector, but when capitalisation rates - or cap rates - are used as a benchmark, there are signs of a recovery.

Cap rates are calculated based on the ratio between net operating income and the value of a property. The researchers noted that when this metric is used to assess the US commercial real estate sector as a whole, "a widespread rebound across most US metropolitan areas" is anticipated among those in the market. Data published in the CB Richard Ellis Global Office Market View for the second quarter of the year supports the assertion that things could be turning around. The firm noted that the Americas region recorded its first quarter of positive rental growth in the office sector during this time, following a prolonged period of decline.
 

- Friday 23 September 2011

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