Marktbericht USA April 2011

With the economy growing at a healthy pace, commercial real estate
fundamentals are finally moving in a positive direction in all sectors.

Executive Summary

• Fears of a double-dip recession have mostly abated, although turmoil in
  the Middle East and the disaster in Japan are reminders that exogenous
  events are always lurking. Questions remain as to how strong the
  recovery will be and how long it will take the space markets to fully
  recover from the recession.
  
• The momentum should continue in the apartment and hotel segments,
  which bottomed a year ago, due to increased demand for rental units and
  rising travel. Fundamentals are just shifting to positive in the office, retail
  and warehouse sectors. Gains in those property types are bound to be
  inconsistent based on the market and segment.
  
• Capital continues to flow to commercial real estate, particularly “prime”
  assets in “gateway” cities. Acquisition yields in a handful of core markets
  have been reduced to historically low levels. Transaction activity is up
  about 50% from a year ago and should reach 2004 levels.
  
• Looming over the market is the prospect of rising interest rates. That
  would increase the cost of capital and likely push acquisition yields
  higher, which could impact property values. However, to the extent that
  rising rates are a harbinger of a stronger economy, upward pressure on
  capitalization rates could be moderated by increasing risk appetite and
  expectations of higher income.
  
• Availability of debt capital is strong and expanding. CMBS programs,
  insurance companies and the largest banks are lending at a healthy level
  for stable properties. Debt is scarcer for properties with leasing issues,
  although an increasing number of specialty lenders are looking to fill that
  niche. The volume of loan resolutions is growing as banks get healthier,
  but the pool of overleveraged loans that are being extended rather than
  refinanced remains massive.
  
• After two strong years of appreciation, REIT stocks are relatively pricey,
  but there is upside if earnings growth is robust. Access to capital is once
  again a strong point for REITs, which are on pace to raise more than
  billion of debt and equity for a second straight year. REITs are looking to
  use that capital for growth through property purchases and mergers. The
  first quarter alone produced .4 billion of announced M&A activity,
  which already makes it one of the most active years in industry history.