According to the fourth quarter PwC Real Estate Investor Survey, US commercial real estate offers a number of opportunities for investors across all sectors. Investors in the office sector are prepared to accept slower growth and are less apprehensive about moving further out on the risk spectrum. Whereas trophy properties are the preferred target for domestic and foreign investors in all sectors, attractive pricing has drawn some of them to properties in strong secondary markets or Class “B” properties in prime markets.
The market offers more stability for investors than stocks. PwC’s Mitch Roschelle, U.S. real estate advisory practice leader, commented recently that most property sectors are “continuing to post occupancy gains and rental rate growth.” Foreign investors are particularly interested in U.S. commercial real estate. They are looking for stable investments and 2013 should see an increase in sales activity.
Investors are feeling optimistic about buying in retail property. The fact that the economic recovery has been slow – and the retail sector continues to face challenging times – has not dampened their enthusiasm about investing in this market. Premium properties are thriving and as a result don’t come onto the market very often.
The PwC Real Estate Barometer predicts the retail sector will show “pockets of strength” to the year 2015. Approximately 45.6 percent of the U.S. retail stock will be in recovery by the end of this year. The office sector is also predicted to grow in the same period in many centers due to a lack of new supply.
The industrial sector will continue to recover. Occupancy gains are being reported in most markets across the United States. This portion of the market is expected to grow annually through the end of 2014. By the end of 2015, it will be in expansion and recovery mode.
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