Commercial real estate continued a steady recovery in 2012 with property fundamentals improving across all major property classes. Capitalization rates for Class A assets also compressed across all major property classes, while transaction volumes lagged behind 5-year historical averages. Despite capitalization rate compression, historically low interest rates have driven risk premiums – as measured by the difference between capitalization rates and 10-year U.S. Treasury yields – to all-time highs in many asset classes.
Improved property fundamentals and compressing capitalization rates have driven a strong rally in commercial real estate valuations. Stronger valuations have translated to a very strong performance among publicly traded Real Estate Investment Trusts (REITs), which have outperformed the general equity markets over a 5-year holding period.
Both the commercial real estate markets as well as the U.S. economy have been heavily impacted in recent years by the negative performance of the single-family residential market. Depressed housing values have destroyed significant wealth, which has negatively impacted the… Read more…
Click here to open the Integra Realty Resources (IRR) 2013 Real Estate Report.
Below you will find a glimpse into its table of content:
Table of Contents:
2 National Real Estate
4 Capital Markets
6 Investment Criteria
8 Capitalization Rates,
Market Rent Change Rates,
Expense Growth Rates and Tenant Finish Allowances
26 Self Storage
27 Seniors Housing