Investors lack confidence in commercial real estate market: survey

New York /
Oct.October 04, 2011 04:16 PM

More than 70 percent of 280 surveyed real estate CEOs, COOs and CFOs said they have a negative, or “bearish,” outlook for the commercial real estate sector over the next 12 months. The poll, cited by Reuters, was conducted by global law firm DLA Piper in connection with its Global Real Estate Summit held today in Chicago.

A lack of confidence in the Obama administration, the general gridlock in Washington and poor job growth were reasons behind the pessimism. Though sales have increased this year, and prices are up 12.5 percent from their lows in April, investors worry that the market will lose more footing.

“What you now see is a growing degree of uncertainty, and uncertainty begins to push money to the sidelines because people are much more reluctant to make a decision,” said Jay Epstien, a partner with DLA Piper.

The 29.4 percent of respondents who were bullish on the market cited increased opportunity for profit as a reason to be optimistic. Even the bears conceded on that point. Seventy-four percent said they did not expect interest rates to change, 67 percent felt cap rates would remain unchanged, and 24 percent believed they would rise.

However financing for deals will be hard to come by, according to about 90 percent of respondents. They expect the commercial mortgage-backed securities market to slow over the next year. Already, just $26.7 billion worth of securities have been issued thus far in 2011, down from $243.3 billion in all of 2007. [Reuters]


Related Articles

arrow_forward_ios
The rate of loans sent to special servicers continued to fall in March. (Unsplash)
CMBS special servicing rate declines in March
CMBS special servicing rate declines in March
Douglas Durst with 1133 Avenue of the Americas (left) and 114 West 47th Street (Google Maps, Getty)
Durst refinances two Midtown buildings with $1.1B CMBS loan
Durst refinances two Midtown buildings with $1.1B CMBS loan
Vornado's Steve Roth. (Getty, Google Maps)
Here’s what tenants are paying at Vornado’s 909 Third Avenue
Here’s what tenants are paying at Vornado’s 909 Third Avenue
The luxury Beekman Tower in Midtown East is now worth nearly half its $146 million valuation from 2018. (Beekman Tower)
Value of Beekman Tower cut by 45% in new appraisal
Value of Beekman Tower cut by 45% in new appraisal
The Promenade on the Peninsula in Rolling Hills Estates, California (Google Maps, iStock)
Landlords take on short-term debt to spruce up struggling assets
Landlords take on short-term debt to spruce up struggling assets
Crystal Mall in Waterford, Connecticut  (Crystal Mall via Facebook, Getty)
Simon’s Connecticut mall valuation slashed by 88%
Simon’s Connecticut mall valuation slashed by 88%
Acore Partner Warren de Haan. (Acore, Getty)
Acore Capital raises $1B to provide rescue cash to hotels
Acore Capital raises $1B to provide rescue cash to hotels
Simon Property Group CEO David Simon and Town Center at Cobb Mall (Getty, Google Maps, iStock/Illustration by Alexis Manrodt for The Real Deal)
A Simon mall falls to foreclosure
A Simon mall falls to foreclosure
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...