Divisions Still Separate Commercial Real Estate Investors From Opportunities

CHICAGO, April 30 /PRNewswire/ -- Despite forecasts of recovery in the commercial real estate market, there remain several factors that will limit a sustainable improvement in 2010, according to a report released by the CCIM Institute and the Real Estate Research Corporation (RERC).

"There are many 'divides' that still separate commercial real estate investors from opportunities," said Richard Juge, CCIM, the 2010 president of the CCIM Institute and president of RE/MAX Commercial Brokers in Metairie, La.  "The recovering economy versus high unemployment, tight debt markets, return versus risk, sellers versus buyers, and prices versus value—all are factors that we'll be looking at closely over the next several months."

According to the report, RERC/CCIM Investment Trends Quarterly, risks to commercial real estate investment are the low space demand caused by high unemployment, vacancy rates increasing and rents declining throughout 2010, banks keeping tight reins on lending and not releasing distressed properties, interest rates expected to increase this fall, and investors missing the inflection point or low period for buying.

"The recovery will vary by geographic location and property type, but for investors seeking to seize market opportunities, 2010 will be the best time in generations to buy well-priced, quality commercial real estate," said Ken Riggs, CCIM, chief real estate economist of the CCIM Institute and president and CEO of Real Estate Research Corporation.  "Investors should view 2010 as a once-in-a-lifetime opportunity to snag key long-term investments."

Riggs says that alternative sources of financing in 2010 include newer local banks, the pooling of funds from wealthy individuals, increased owner/user financing, credit unions, regional banks, and insurance companies.

"Who is buying commercial real estate?  Private funds are the powerhouse buyers.  Also active are the cash-rich or high net worth investors, large institutions and groups, REITS, foreign investors from Canada, China, and Germany, and opportunistic buyers," said Riggs.

About the Survey

Published quarterly, the RERC/CCIM Investment Trends Quarterly report provides timely insight and analysis into transaction volume, pricing, and capitalization rates for core income-producing properties. The RERC/CCIM Investment Trends Quarterly is produced by the Chicago-based Real Estate Research Corporation (RERC) in association with and for members of the Chicago-based CCIM Institute.  To request an interview or a copy of the survey, please contact R. J. Sirois at 312-321-4494 or [email protected].

SOURCE CCIM Institute