Real Estate Pros See Fundamentals Chasing Prices

LOS ANGELES-Developers, capital sources and other commercial real estate professionals are optimistic that fundamentals will catch up with fast-rising prices, an Allen Matkins/UCLA Anderson survey of those commercial real estate sources shows. The survey “provides clues to current commercial real estate asset prices and a turnaround in the market,” according to an introduction to the survey results.

The Allen Matkins/UCLA Anderson report on the survey notes that, over the past 18 months class A commercial real estate values have increased to near peak levels. “The increase is not supported by the current rental and occupancy rates. This rise in asset prices is either an indicator of investor expectations of improving fundamentals over the next three to four years or the beginning of a new asset bubble,” the introduction says.