July 9, 2004—Nearly three-fourths (71.6 percent) of real estate professionals believe that commercial real estate activity will either strengthen (35.8 percent) or stay the same (35.8 percent) within the next 12 months, according to the results of the first-annual Bryan Cave Real Estate Executives’ Forecast Survey released today. Only 26.9 percent of the professionals believed that real estate activity would weaken, indicating a sign of strong confidence and optimism about the market.
Despite these findings, only 37.3 percent of the professionals think that the United States commercial real estate market is fairly valued. One-half (51.5 percent) of those surveyed believe that commercial real estate in the United States is currently overvalued. The remaining 4.5 percent believe real estate is undervalued.
Professionals interviewed were particularly interested in metropolitan multifamily high-rise residential investments. More than one-fourth (26.1 percent) indicated that metropolitan multifamily high-rise residential real estate would be their first choice for an investment opportunity.
“The survey results clearly show that real estate professionals are optimistic about the coming year, notwithstanding the full price that better properties are commanding,” said Barry C. Ross, Co-Leader of the Real Estate Development, Construction and Project Finance Client Service Group. “However, our survey does show, that not surprisingly, the real estate industry is concerned about the effect an increase in interest rates would have.”
The Bryan Cave Real Estate Executives’ Forecast Survey was conducted among commercial real estate professionals such as brokers, lenders, and mortgage bankers at a variety of companies. It involved 134 commercial real estate professionals from across the nation. The survey is based on voluntary opt-in online interviews generated from an email communication from Bryan Cave. The interviews occurred between April 15 and May 20.
For more information, contact Bryan Cave LLP.
