MARKETTRENDS
Real Estate Investment
Condition Ratings 1 = poor; 10 = excellent
10
0 1 2 3 4 5 6 7 8 9
4Q11 4Q10
5.6 5.2 5.1 4.9 4.7 4.4 Office Industrial Retail Multifamily Hospitality Source: RERC/CCIM Investment Trends Quarterly, 1Q12
Hospitality — The lodging industry will experi- ence "greater profi tability for the next two years and an increase in hotel investment," reports PKF Hospitality Research, forecasting solid 2012 fundamentals: a 5.8 percent increase in room revenue, a 1.6 percent occupancy increase, and a 4.1 percent gain in room rates. PKF also pre- dicts an "unprecedented six-year run of occu- pancy growth," based on a limited new supply and increasing demand.
Industrial — NAIOP forecasts industrial space demand to grow at 1.01 percent for 1Q12, at "the low end of normal," but predicted that demand would pick up substantially in second or third quarter, barring economic shocks.
4Q11 Outstanding Commercial Mortgage Debt
Life insurance cos. $313 billion
13%
Agency, GSE
portfolios, MBS
$342 billion 25%
CMBS, CDOs, and other ABS issues $589 billion
Source: Mortgage Bankers Association 15% 34%
Commercial banks $794 billion
Multifamily — Fannie Mae and Freddie Mac multifamily originations hit an all-time high in 4Q11, according to the Mortgage Bankers Asso- ciation, which reported that all 4Q11 multifamily loan originations were up 31 percent over 4Q10 and up 29 percent over 3Q11, in both cases the second-highest increase among the fi ve major property types.
Offi ce — In the fi rst six weeks of 1Q12, medical offi ce sales totaled $352.7 million with another $1.2 billion in pending transactions, according to Real Capital Analytics. But investors are pay- ing on average 97.8 percent of replacement cost, with the average overall capitalization rate falling to a pre-recession level of 7.9 percent, reports the 1Q12 PwC Real Estate Survey.
Retail — Transaction volume in the $1 million to $10 million range decreased 14 percent, accord- ing to Marcus & Millichap, refl ecting private buy- ers' limited access to capital for purchases. Since 2008, the percentage of private buyers in the retail market has been cut in half, while activity by equity funds has increased the most.
8 May | June | 2012 Commercial Investment Real Estate 7.5 6.6 5.5 4.8
Briefl y Noted
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