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Investors' Outlook Turns Positive in Q1

NEW YORK CITY-Challenges remain, but most respondents to the quarterly Korpacz survey say they finally see light at the end of a very long tunnel.

By Paul Bubny | Updated on March 16, 2010

NEW YORK CITY-For the first time in about two years, commercial real estate investors responding to the PricewaterhouseCoopers/Korpacz quarterly survey are looking at the future with a sense of optimism. That more upbeat attitude prevails as they acknowledge that many challenges remain, PwC’s Susan Smith tells GlobeSt.com.

“Investors feel that they’ve turned the corner and they can see the light at the end of the tunnel—it’s just that the tunnel is very long,” says Smith, director of PwC’s real estate advisory practice and editor of the survey. “It’ll take a while to reach that light, but at least they can see it.” The pessimistic tone of voice that Smith heard when conducting interviews for the fourth quarter 2009 survey is “gone” now.

As an illustration of investors’ greater optimism—as well as one of the reasons for that positive attitude—respondents in 19 of the 30 markets say they expect cap rates to hold steady for the next six months. In the survey for Q4 ’09, just two markets offered such a forecast; previously, the cap rates had been on the rise.

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