CRE: A Somewhat Safe Investment in Uncertain Times

CHICAGO-Uncertainty about the economy, combined with sluggish job growth and the upcoming general election have made investors wary about where to park their monies. According to locally based Reach Estate Research Corp.’s Q2 2012 Real Estate Report entitled “Challenges Mount, Flight to Safety,” institutional investors consider some types of commercial real estate to be a safer place to park money than even cash, though CRE confidence did decline slightly from the previous quarter.

On a scale of 1 to 10 (with 10 representing the most confidence among those surveyed), investors rated commercial real estate at 6.8, which was down slightly from 6.9 at the beginning of 2012. Other investment types such as stocks were rated at 5.2; bonds were rated at 3.5 and cash at 3.9. Furthermore, while current availability of capital was ranked at 7.1 (a slight increase from the previous quarter), capital discipline was at 6.4 (a slight decrease from the previous quarter).