REITs Lead Industry's Recapitalization
REJournals.com reports: REITs' access to the capital markets is being seen as a part of the solution to the looming debt maturities in the commercial real estate market. The liquidity added to the market has helped improve balance sheets and additional capital could ultimately help open the transaction markets. Given its level of property sales thus far this year, the industrial market certainly could use the boost. For the first nine months of 2009, industrial sales in North America were $5.3 billion, down 72 percent and 87 percent versus the same periods of 2008 and 2007, respectively, according to Real Capital Analytics.
Sales in the Chicago market were $430 million for the same period, down from $1.1 billion and $2.2 billion for the comparative periods in 2008 and 2007, respectively. Interestingly, average cap rates across the country on completed sales in 2009 have been better than many originally anticipated, with September 2009 sales averaging 8.55 percent. The anticipated high levels of distressed assets have yet to materialize, much to the chagrin of a number of funds and investment pools established to take advantage of potential market fallout. Additional price discovery through more reported transactions will give all participants, private and public, a better understanding of values and more confidence to transact.
View the full article on REJournals.com: REITs Lead Industry's Recapitalization
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Posted by: Mark Alferman