NEW YORK CITY-“The unknown speed and strength of the recovery have many in the industry anxious,” comments an investor in the latest PricewaterhouseCoopers Korpacz Real Estate Investor Survey. Combine that with a relative dearth of institutional-grade assets on the market, and the result is what the report calls “calm” deal flow.

However, a majority of commercial real estate investors see light on the horizon in the form of shrinking cap rates. Average cap rates declined in 17 of the survey’s 30 markets over the past quarter, with declines ranging from two basis points for San Diego office to 58 for Pacific Northwest properties in the same sector. Over the next six months, survey respondents expect cap rates to hold steady in 18 markets and foresee further declines in 13 others, by as much as 100 basis points.

In particular, investors surveyed by PwC cited 100-basis point potential declines in near-term overall cap rates for Manhattan office, national warehouse and national apartment. For the 18 individual office markets in the survey, average overall cap rates remain lower for central business district submarkets than in the suburbs. This suggests that investors continue to see less risk and better investment potential in CBD assets.