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Slow, Steady And Strong Growth Primes Investment Market Into 2013

Stocks in this article: JLL

CHICAGO, Oct. 17, 2012 /PRNewswire/ -- Strengthening fundamentals and higher yields relative to other asset classes continue to give commercial real estate great investment appeal as the global economy struggles to recover from the Great Recession. The commercial real estate industry's measured and steady recovery is expected to bolster further growth in the United States in 2013, with the greatest demand amidst the multifamily, office and industrial sectors, according to respondents of Jones Lang LaSalle's 2013 Cross Sector Survey. Presented today at the Urban Land Institute's Fall Meeting in Denver, the survey provides a roadmap of investors' future attitudes and points to increasing investment activity in this appealing asset class in the year ahead.

(Photo:   http://photos.prnewswire.com/prnh/20121017/CL95085 )

Jones Lang LaSalle's 2013 Cross Sector Survey is an independent analysis based on a collection of independent research findings and survey responses from more than 480 industry real estate development professionals, investors and property owners, many of whom will attend this year's Fall ULI Conference. View this video: http://youtu.be/rgqiacdS25Y

While unemployment and Eurozone fears remain top of mind and an uncertain United States political picture is introducing more cautious action, 56 percent of industry respondents to the Cross Sector Survey expect their investment activity to rise by as much as 20 percent in 2013, compared with last year. The increasing investment trend was already evident in the third quarter as apartments transactions picked up strength in August after a July lull, the suburban office market showed improvements from medical office portfolio sales and the market registered gains in malls and other retail, outside of strip; as well as growth in industrial outside of flex.

"This year, we're likely to close 2012 with only a 10 percent improvement over last year in investment trades for all sectors, excluding hotels," said Jay Koster, President of Jones Lang LaSalle's Americas Capital Markets. "While the growth rate has slowed, the investment transaction market is still markedly above the 2009 floor and transactions are still improving in the face of significant economic headwinds. The record-low Treasuries are also giving the transaction market a boost as an attractive lending market should continue to pave the way for a strong fourth quarter and an increase in investment transactions in 2013."

Property owners and investors are also recognizing the improved health of the tenant market as corporations today hold stronger balance sheets and improved economic outlooks. More than three-quarters of study respondents (77 percent) indicated the occupancy of their portfolios should increase next year, and in healthy percentages. Fifty-seven percent of the optimistic majority expects the occupancy of their portfolios to increase by 10 percent in 2013, and an additional 20 percent expect an increase of 10 to 20 percent in 2013, over 2012.

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