Commercial Market to Correct in 2008
Source: Pacific Business Journal (Honolulu)
Many experts in the commercial real estate sector are predicting slowing in 2008 that will correct the commercial market. The slowing has been called a “healthy correction”. Long-term investors will most likely not be affected by the slowing in 2008 but it will affect short-term investors and those who have over leveraged in the commercial market.
This comes from a recent report released by the Urban Land Institute and PricewaterhouseCoopers LLP. Many experts in the commercial industry predict that in 2008 capitalization rates will increase and risk prices to change. Although the market will adjust and slow a bit the commercial market is still predicted to outperform the stock market. Some of the positives will come from adjustments in the commercial real estate market include: establishing balance in supply and demand, filtering out low-quality commercial investors, stabilizing development but curbing current over development.
The commercial market has been busy and moving along for years now but there are some who have invested too much and stayed in it too long. These are some of those that will be affected by slowing in 2008 but long-term investors with moderate investments will likely be unaffected.
Check out the full report here>>