This report showcases the best bets for development and investment in 2010, providing the heads-up on where to invest, what to develop, which markets are hot, and how the economy, and trends in capital flows will affect real estate.
Urban Land Institute reports that respondents to the Emerging Trends cite the best investor bets for 2010 which include:
- Deal with cash – Cash is the only way to operate and only the most liquid can take advantage of the emerging opportunities.
- Patience will be rewarded - Early is the new wrong as the economic uncertainty will hamper the recovery. The absence of ready refinancing in comatose debt markets adds more risks.
- Focus on quality and be selective – Seek irreplaceable Class A properties with debt maturity in places like New York, San Francisco and Washington, DC.
- Stick to global pathways where recovery will happen more quickly.
- Buy cash flow and real yield – Anticipate creating value by filling vacancy and increasing rents over time.
- Provide financing as three to five year loans can deliver low teen returns.
- Implement asset management triage – Focus capital and resources on retaining and attracting tenants in properties with better long-term value.
Core Assets are also requiring capital infusions
This is a great article for the everyday investor to read. It is a statement on the market and the problems many commercial property owners are facing. It is also interesting to note how organizations with fresh capital are looking to deploy their money. The difference between Madison and other groups is that they are looking for stable assets in core locations around the world rather than distressed assets that require repositioning. As busy as they are, one can extrapolate that even the best assets have their challenges.
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