NEW YORK, March 27, 2007 (PRIME NEWSWIRE) -- Investor confidence in the commercial real estate sector remains strong during the first quarter of 2007, despite dire rumblings from the nation's homebuilding and home mortgage industries, according to PricewaterhouseCoopers' First Quarter 2007 Korpacz Real Estate Investor Survey(r). The latest report marks the Korpacz Survey's 20th anniversary, making it one of the longest continuously published surveys in the industry.
Among the Central Business District (CBD) office markets that saw significant year-over-year gains in sales volume during 2006 included Boston (plus 195.0%), Philadelphia (plus 116%), Atlanta (plus 106%), Chicago (plus 75%) and Seattle (plus 71%). At the other end of the spectrum were major CBD districts that registered significant declines, including Washington, DC (minus 14%) and San Francisco (minus 19%) during the same period, the survey reported. Individual suburban office markets that reported the highest sales volumes included Los Angeles, Northern Virginia, San Jose, Dallas, Denver and Atlanta.
"As underlying fundamentals continue to tighten in the nation's CBD and suburban office markets, evidenced by steadily increasing rental rates as well as decreases in concession packages, investor demand continues unabated," said William E. Croteau, U.S. Real Estate leader for PricewaterhouseCoopers. Overall, the national sales volume for significant office properties (excluding REIT privatizations) during 2006 rose 17% for individual properties and 21% for portfolios, according to PricewaterhouseCoopers LLP.
A trend identified by the survey was a growing interest among investors to acquire assets that are not the core stable, well-leased variety that are traditionally preferred.
"Increasingly, investors are looking to purchase so-called value-added properties that offer income and value appreciation and higher returns through re-tenanting, repositioning, and/or the re-leasing of available space," noted Peter F. Korpacz, director of Global Real Estate Research for PricewaterhouseCoopers. "Investment strategies may be changing among office investors but their desire to own commercial real estate appears unwavering -- and may have strengthened recently given the recent downward movement in the stock market."
The first quarter 2007 edition of the Korpacz Real Estate Investor Survey(r) marks its 20th year of publication, making it one of the industry's longest continuously produced quarterly surveys. The survey was originally a six-page overview of five markets including the Manhattan office, national office, national oversupplied, national retail and national industrial markets.
The current report provides detailed overviews of 29 separate markets, including the national retail markets (regional mall, power center and strip shopping centers); overviews of 15 major office markets; and national overviews of the CBD and Suburban Office, Flex/R&D, Warehouse, Apartment, Net Lease, and National Lodging markets (Full-Service, Economy Limited-Service, Lodging Upper-Upscale, Extended Stay segments). The report also features up-to-date commentaries concerning Valuation Issues, Technology News and Trends, Economic News, and the Real Estate Capital Markets
The First Quarter 2007 edition also features the first installment of a four-part retrospective that chronicles the history of the Korpacz survey and its key findings on the real estate industry since 1988, the first year of the survey. Future installments will appear in subsequent quarterly reports.
Information about subscribing to the PricewaterhouseCoopers Korpacz Real Estate Investor Survey(r) can be found at www.pwcreval.com. Members of the media can obtain an electronic copy of the full report by contacting thomas.derr@us.pwc.com or phone: (646) 471-8268.
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