Each Thursday, we’ll use the CRE Reads vehicle to present a compilation of noteworthy commercial real estate stories from a variety of publications. Below are recent stories that caught our attention.
CRE: A Somewhat Safe Investment in Uncertain Times by Amy Wolff Sorter of Globe St.
Uncertainty in the economy is affecting investing across many markets, but this article boasts the benefits of investing in commercial real estate as a relatively safe haven for investors.
Investors rated confidence levels for commercial real estate above those of stocks, bonds and cash, according to a report by Reach Estate Research Corp.
However, the report said that the type of commercial real estate is important, noting multifamily, industrial, warehouse and neighborhood/community retail center properties as strong investments. Investment conditions are down though for hospitality, industrial R&D and retail power centers.
US home prices post first 12-month gain since Sept. 2012, with steady gains in most big cities by the Associated Press via The Washington Post
The housing market has a huge impact on the overall economy, and therefore commercial real estate, so this article on rising home prices certainly caught our interest.
Home prices in June rose from the same time last year, according to Standard & Poor’s/Case Shiller index. In all 20 major metro areas the index tracks, prices rose in June from May for the second straight month.
Rising prices, brought on by declining foreclosures and low mortgage rates, are fueling the housing recovery. The market could also benefit when more Americans put their houses up for sale, encouraged by higher prices.
Higher home prices can also increase consumer confidence and lead to more spending, which accounts for about 70 percent of economic activity, the article noted.
U.S. REITs Enjoy Strong Access to Capital by Carisa Chappell of REIT
Things are looking good for U.S. equity REITs according to this article which references a report from Fitch Ratings.
Equity REITs have seen strong funding and access to capital during the first half of 2012.
REITs have raised approximately $43 billion in funding and are using the extra capital to fund upcoming projects and pay down lines of credit. The healthy fundraising activity is expected to continue for the remainder of the year, however it might be at a slower pace.
Give Me Your (Moneyed) Masses: Congress Extends Investor Visa Program and Important Source of CRE Funding by Randyl Drummer of CoStar
Last week, the House of Representatives voted to reauthorize the Immigrant Investor Program for at least another three years. This is great news for the commercial real estate industry because the program allows foreign nationals to obtain a visa in exchange for investing in U.S. real estate development and other job-creating ventures.
Uncertainty over whether or not there would be a renewal of the program held back pending projects that relied on the visas, but now those and new ventures are able to move forward, the article notes.
Not only do foreign investors lend money to construction and development projects, but also once they’re here they benefit the overall economy, purchasing real estate and retail products, attending universities and paying taxes.