Emerging Trend in 2004: 'Cautiously Pessimistic'

SAN FRANCISCO- Real estate investors’ outlook for the industry in 2004 ranges from “cautiously pessimistic” to “at best, less sanguine,” according to an annual survey of industry executives by the Urban Land Institute and PricewaterhouseCoopers LLP.

Based on surveys and interviews with more than 350 industry executives, Emerging Trends in Real Estate 2004 respondents widely regard next year as a “transition” period, as markets move toward a weak recovery thanks to an increase in corporate outsourcing of jobs overseas, a lack of US job generators and fiscal woes at all levels of government.

First distributed late last week at the ULI’s fall meeting here, the report found, as expected, weak market fundamentals, including high vacancy rates, falling rents, resurgent concessions, rising property taxes and higher operating expenses. And if interest rates rise too quickly before job growth drives up leasing activity, the report found investors expect property values would fall even further as the economic recovery gathers steam.