Survey: Investors Go Into Survival Mode

NEW YORK CITY-Commercial property owners surveyed by PricewaterhouseCoopers are not waxing enthusiastic about the hand the downturn has dealt them. “As frightening as it seems, the worst is not behind us,” the quarterly Korpacz Real Estate Investor Survey quotes one participant. “We will feel more pain before we hit bottom and start to recover,” says another. With that zeitgeist as the backdrop, the response of a third participant sums up the report’s basic finding: “We are more in survival mode than in acquisition mode.”

Increasingly, investors are looking to protect the value of their existing properties “in order to compete and survive in an increasingly challenging environment,” according to PWC, which issued the survey on Tuesday. Real estate investors don’t anticipate a rebound in any sector until well into 2010, the survey states. Meanwhile, “property owners are faced with limited financing options, declining tenant demand, rising overall capitalization rates and deflated confidence,” according to the survey.

“Tenants are in the driver’s seat, and landlords are in survival mode, trying to preserve revenue streams in one of the harshest ownership environments ever encountered,” says Tim Conlon, partner and US real estate sector leader for PWC, in a release. “It will be survival of the fittest going forward, with owners who are able to remain financially strong being better positioned to capitalize on the buying opportunities that are to come.”