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Flight to Quality

Amid all the talk about peak-to-trough value losses of 40 to 50 percent in commercial/multifamily real estate, some sectors in certain 24-hour cities may be firming up even as the overall market continues to sink-albeit more slowly. This very limited phenomenon embraces a classic flight to quality and...

By Jonathan D. Miller | Updated on December 14, 2009

Amid all the talk about peak-to-trough value losses of 40 to 50 percent in commercial/multifamily real estate, some sectors in certain 24-hour cities may be firming up even as the overall market continues to sink-albeit more slowly. This very limited phenomenon embraces a classic flight to quality and appears to concentrate in Class A apartments and select high quality office in the primary coastal gateway markets.

Investors with cash-remember we´re talking cash buyers since there is little if any available credit-circle apartments, because they figure there will be significant pent up demand among young adult baby echo boomers who have been doubling up or moving back in with parents. As soon as, jobs activity and wages show some sign of upticks, more people will look to rent their own place. House-hunting won´t be in the cards because of ongoing credit restraints-the days of putting little to nothing down are over for the foreseeable future.

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