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Commercial Real Estate Sound With Record Investment
WASHINGTON, June 13, 2007 - Investment in commercial real estate remains at record levels with sound fundamentals in most sectors, according to the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors®.
Lawrence Yun, NAR senior economist, said there are variations across the commercial sectors. “The overall office market has been booming, the industrial sector is holding its own, retail is a bit sluggish while apartments are strong with some condo conversions reverting to rental,” he said. “We expect fundamentals to remain basically sound for the commercial sectors.”
Outside of the hospitality sector, a record $157.0 billion was invested in commercial real estate in the first four months of 2007, up from $97.0 billion in same period in 2006; that total does not include transactions valued at less than $5 million.
Cindy Chandler of Charlotte, N.C., chair of the Realtors® Commercial Alliance, said investors clearly like the office market. “So far this year, 60 percent of all commercial real estate purchases have been in the office sector,” she said. “We expect the flow of capital into commercial sectors to remain strong throughout the year, driven by large portfolio transactions and REIT privatizations, as investors continue to value diversification. This could make 2007 another record year for commercial investment.”