PricewaterhouseCoopers’ Korpacz Real Estate Investor Survey results were released today showing that the aerage overall cap rates decrease in 26 of the surveyed 31 markets. The current report provides overviews of 31 separate markets, including ten national markets — regional mall, power center, strip shopping center, CBD office, suburban office, flex/R&D, warehouse, apartment, net lease, and medical office buildings. The report highlights an improved lending environment with strong appetites from both debt and equity capital for quality real estate assets, with some surveyed investors noting a surprise at the speed at which debt availability has rebounded over the past year. “Many investors were waiting to pounce on the anticipated overflow of underwater and distressed-quality assets, but that scenario never quite materialized as expected,” Susan Smith, PwC’s real estate advisory practice director and survey author, said in a statement cited in the Denver Business Journal.
Key hilights specific to the office market and economy include:
As a whole, the office market continues to struggle. Although the overall vacancy rate for the national Central Business District (CBD) office market improved slightly, job growth and feeble tenant demand remain top concerns. Lackluster fundamentals are keeping investors and lenders focused on quality office properties and top-tier markets.
With the fragile economy continuing to hamper consumer spending, the retail sector is showing mixed reviews. While leasing activity remains sluggish in the national mall market during the second quarter of 2010, surveyed investors note that the dynamics of the leasing market are stabilizing.
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