CRE Recovery Reassures of Stability in Broader Economy
Bloomberg - Businessweek reports: A recent article in Bloomberg’s Businessweek publication synthesized the plethora of good news emerging from the commercial real estate sector in recent weeks, and placed it in the context of the broader economy. “From Manhattan office towers to apartments in Florida to retail properties in Washington, commercial real estate values are rising, defying predictions of a collapse that would drag the U.S. economy back into recession,” read the opening paragraph.
Relying on data aggregated by Real Capital Analytics (RCA), Businessweek cited that office property sales in the US more than doubled between 2009 and 2010, to $41.6 billion. In its most recent US Capital Trends 2010 Year in Review edition, RCA reported sizable year-over-year increased for each of the main commercial property types in the US. RCA’s Dan Fasulo remarked that these large increases are partially attributable to “…the strategy put forward by the government: keeping interest rates low and giving lenders some flexibility to hold these troubled assets on their books for a while…Now that values are on the upswing, it’s given owners and lenders more wiggle room to work out these troubled situations.”
Among other contributors to the commercial property sector’s recovery include “a resurgent debt-securitization market” and “an expanding economy” although both remain well below peak-year levels. Businessweek also stipulated that the nation’s leading metros have seen the largest advances in sales and fundamentals over the past year, while other markets have lagged, just as the office and apartment sectors have seen the biggest improvements so far this cycle, while retail and industrial properties are still finding their strides.
For a complete and in-depth analysis of the commercial property recovery thus far, please see the full article on Businessweek’s site.
View the full article on Bloomberg - Businessweek: CRE Recovery Reassures of Stability in Broader Economy
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Posted by: Nina Turner