Favorable trends emerging.For the first time since 1984, Emerging Trends in Real Estate sees a generally positive direction taking hold for the nation's real estate industry. The industry's leading forecast, published annually by Equitable equitable adj. 1) just, based on fairness and not legal technicalities. 2) refers to positive remedies (orders to do something, not money damages) employed by the courts to solve disputes or give relief. (See: equity) EQUITABLE. Real Estate Investment Management, Inc., and Real Estate Research Corp., states that the "recovery process has begun, and prospects for investment real estate should improve slowly but steadily through the end of the decade." The 15th annual edition of Emerging Trends, which measures the industry's health through more than 100 in-depth interviews with industry leaders and experts, sees these trends for 1994 and beyond: *Real estate actually surpasses stocks and bonds in future investment potential. *Pension fund investors will return to real estate in 1994. *REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). activity will cool down next year. *Multi-family, industrial warehouse, and regional mall properties, in that order, are sparking cautious interest. *Apartments, the top choice, are in tight supply, and values are actually increasing. *Hotels still hold little interest for institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. , despite improved balance sheets. *Washington, D.C. and Atlanta rank as the nation's strongest markets for real estate investment. Denver jumps to third, spurred by dramatic strengthening in its residential category. *Corporations want and require less office space now than in former years, and the interviewees see that trend continuing, rating downtown office 3.6 and suburban office 4.4 on a scale of 1 (poor) to 10 (great). Apartments and warehouses, by contrast, rated 5.9. *Wall Street activity - REITS REITS Real Estate Investors of the Tri-States (Harrison, TN) , commercial loan securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. and venture capital funds Venture Capital Funds An investment fund that manages money from investors seeking private equity stakes in small and medium-size enterprises with strong growth potential. Notes: - is returning liquidity to the markets, Emerging Trends reports. But the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. , yield-oriented nature of REITS will make them a niche investment category, rather than a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. influence on real estate finance. *Renewed interest in real estate may be due to its comparison to alternative capital investments. The fear of an inevitable bear market is making some securities investors look elsewhere, while high yields are making mortgage investments particularly appealing. On the one-to-ten scale, real estate rated a 5.9, compared to stocks at 5.7 and bonds at 5.5. While 63 percent of the interviewees indicated plans to invest in real estate in 1994 over 80 percent of pension fund interviewees said they planned to make new real estate investments. |
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