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Experts Forecast Attractive Returns for 2001 Real Estate Investments

NEW YORK CITY-B/B+ apartment buildings on the East and West Coast are regarded positively by survey interviewees as is class A distribution space near transportation hubs. Limited-service hotels should be avoided, however.

By John Howe | Updated on November 08, 2000

NEW YORK CITY-The outlook for commercial real estate investments over the new few years is solid and is expected to outperform the stock market in 2001. Investors should not expect breathtaking returns however. Overall, unleveraged returns of 11% are anticipated for equity real estate; REITs should turn in a 12% gain. These are among the forecasts of “Emerging Trends in Real Estate 2001,” a report based on interviews with more than 150 industry experts.

Those interviewed regard the B/B+ apartment buildings in the East and West Coast as buy or hold properties. Twenty-something singles are priced out of upscale class A space, the report states. “It’s hard to miss in this sector, given the long-term trends, but buyer demand may force pricing up to uncomfortable levels, especially for new product.”

Emerging urban centers with 24-hour city characteristics that are embedded in the suburbs offer the best opportunities for new multifamily construction due to the influx of the move-back-in crowd.

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