NEW YORK CITY-Despite growing confidence and improving fundamentals in the commercial real estate sector, access to capital and uncertainty of government policy remain the chief concerns of senior-level executives in the industry. A survey of 150 respondents following Akerman Senterfitt’s third annual US Real Estate Summit found revealed that while 82% expressed greater confidence in the market – an increase of 6% from last year – the recent recovery is still tenuous.
“People are more comfortable year-over-year,” Rich Bezold, chair of Akerman’s national real estate practice group, tells GlobeSt.com. “That is a good sign, but when you’ve got global economic uncertainty, I think everybody has their eye on what’s going on in Europe and in other parts of the world. This being an election year, there probably won’t be a whole lot that happens, with concerns that 2012 will be a little stale until people have certainty one way or another.”
According to survey results exclusively released to GlobeSt.com, respondents cite the policies of the current administration (38%) and global economic uncertainty (30%) as the reasons for a lack of confidence in the industry’s outlook for 2012. But almost half of the participants (44%) cite the availability of credit as the most pressing issue facing the real estate industry right now, though down 10% from 2011.
Bezold says the problem spreads across all asset classes throughout the country. “We’re going to need debt and equity credit for obviously refinancing of loans that are maturing,” he says. “For people that want to do new development, they need capital to be able to do that. If the equity or the debt’s not there, it makes it very difficult for them to do their new deals.”
For that capital that’s out there, approximately 44% of respondents expect private equity to fund a significant portion of commercial real estate debt and/or equity in 2012, compared to banks (32%) and foreign investors (29%).
This year thus far, Bezold says investors have been putting money into REITs, funds and private investment – and that trend will continue, given the slow return of CMBS.
“That’s all ready to be deployed, and they are trying to find good places to deploy that money,” he adds.
Overall, there was a broad consensus among survey respondents that the multifamily sector would be the most active in terms of the number of real estate transactions, foreign investment and return to pre-recession levels.
“Credit seems to be a little bit easier for the multifamily sector, but as you get into the other sectors, there seems to be good debt and equity if you are in an A market, especially if you have an A property,” Bezold explains. “But if you’re a B property in a B market, what our clients are finding that it is much harder to find available debt to refinance or to do deals in those other markets.”
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