By Tony Wilbert, Wilbert News Strategies
AUSTIN, Texas (June 4, 2010) – Though the U.S. office and industrial markets continue to struggle, each sector has a bright spot. Specifically, demand for medical office/bioscience properties and data centers is holding up well in the challenging commercial real estate market, CityView Executive Chairman Henry Cisneros said this week.
The need for mission-critical facilities such as data centers and medical office buildings should continue to outpace demand for tradition office and industrial space, Cisneros told the 44th Annual National Association of Real Estate Editors Conference in Austin.
Cisneros served as Housing and Urban Development (HUD) secretary from 1993-1997 under President Bill Clinton. As executive chairman of Los Angeles-based CityView, an urban institutional invement firm, Cisneros has been involved with more than $2 billion in commercial and residential real estate transactions covering 45 projects in 13 states. CityView is an offshoot of American City Vista, a firm Cisneros founded in 2000 to work with homebuilders to develop homes average Americans could afford.
He does see other “promising” sectors of the commercial real estate market. “Hotels can lead commercial real estate to recovery” because practically no new supply was added during the recession. Infrastructure work such as transportation and ports projects will boost the commercial real estate industry as well.
The apartment sector also is very promising, Cisneros said. As the percentage of Americans who own homes continues to fall due to the mortgage crisis, demand for apartments will increase, he said. The national homeownership rate has fallen from 70 percent to about 65 percent, and each point of decline equates to 1.5 million households needing new places to live, Cisneros said.
“There will be a major need for apartments,” he said.