Last year's improvements spark investors' enthusiasm.Building on the solid gains in real estate performance this year, 1996 is expected to be a good one for investment real estate, and furthermore, the industry can look forward to an extended period of prosperity. This is the majority opinion of the institutional real estate investor-respondents in the recent Korpacz Real Estate Investor A real estate investor is someone who actively or passively invests in real estate. An active investor may buy a property, make repairs and/or improvements to the property, and sell it later for a profit. Survey. "This was a 'fat year,' as the word 'prosperous' finally re-entered the real estate vocabulary," says Peter F. Korpacz, MAI MAI Mail (File Name Extension)
MAI Multilateral Agreement on Investment
MAI Maius (Latin: May)
MAI Ministerul Administratiei si Internelor (Romanian) , publisher of the survey.
Some analysts believe that in our lifetime we will never again see a nationwide real estate depression, reports the survey. Rather than one national real estate cycle - or business cycle, for that matter - a future of rolling cycles, rolling recessions, is more likely. The experience of the past 10 years, when the real estate recession hit Texas and the Oil Patch oil patch
1. The petroleum and natural gas industry.
2. An oil-producing region. , then New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , then New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. , then the Midwest, and finally the West Coast, is the anticipated future pattern.
Real estate investors are tending to employ good, solid portfolio theory, which should create a flexibility between product type as well as location. "It's a healthy sign that investors recognize when a certain market is really hot and decide to pay a return to the people whose money they're investing and go on to invest in another market that is on the way up," says Korpacz, quoting a confident survey participant. "This is the best real estate market in 10 years, and we're doing things intelligently."
Participants in the Korpacz Survey expect the national economy to remain steady, interest rates to move downward, and inflation to stay low. In real estate, they look for more absorption, improved rents, and higher values. All in all, the consensus is that 1996 will be even better than 1995.
Industrial and Office Properties Top Target Lists
Industrial warehouse/distribution facilities are the clear favorite acquisition target among institutional investors, as they have been since mid-year. These properties are considered both stable and relatively liquid; therefore, demand continues to exceed available supply.
Competition for suburban office property is intense, and consequently, prices are rising. Although interest in CBD (Component Based Development) Building applications with components (objects). See component software.
CBD - component based development office buildings is rising, it is guarded. Among the concerns of would-be investors is the state of flux Noun 1. state of flux - a state of uncertainty about what should be done (usually following some important event) preceding the establishment of a new direction of action; "the flux following the death of the emperor"
flux of many of the businesses that are traditional downtown tenants. Bank mergers present an enormous problem, since two of the biggest users in any CBD are banks and law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:
Some regional mall tenants are going into bankruptcy, rents are flat, and market share continues to be eroded by big-box retailers and other competitors. In addition, as malls nationwide are aging, more owners are faced with expiring operating agreements with the department store anchors that draw consumers to the centers. "No wonder regional malls have lost their allure as prime investments," comments Korpacz.
The impending im·pend
intr.v. im·pend·ed, im·pend·ing, im·pends
1. To be about to occur: Her retirement is impending.
2. onslaught of department store operating agreement expirations is drawing attention to a problem that has been building over the past several years, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the Korpacz report. Since the majority of mall development occurred during the 1970s and early 1980s, the term of many original covenants is ending. "Uncertainty about the permanence of the anchors can have a major impact on a mall's marketability," Korpacz explains. "The prospective buyer who finds that the anchors' sales volumes are good, the stores are profitable, and they are not candidates for merger or buy-out, will likely take the bet that they will remain in the mall," he says. "If the reverse is true, new agreements must be negotiated before an owner can sell the property, an often costly proposition."
(Peter F. Korpacz & Associates, Inc., publisher of the Korpacz Real Estate Investor Survey, is based in Frederick, MD. The firm offers comprehensive real estate appraisal Real estate appraisal
An estimate of the value of property using various methods. services as well as analytical studies, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. counseling, arbitration and mediation, and transaction counseling on institutional-grade real estate. Through its research and publishing division, the firm conducts research-based studies and develops publications for a diverse client base.)