Real estate fundamentals couldn't be better.

"The just-released, quarterly RERC/CRE Real Estate Report, continues to reflect good news for real estate professionals and the public in general," according to Steven D. Leader, CRE, 1998 president of The Counselors of Real Estate. "Most property types in most locations are experiencing low vacancies, high rents, and rising values."

"Many indicators point to the real estate market bolstered by a strong economy" said Kenneth P. Riggs, Jr., CRE, president, Real Estate Research Corporation. "The unemployment rate is at its lowest since the first quarter of 1970. However, real estate professionals increasingly report on seeing signs of overbuilding, risky underwriting criteria (especially by lenders who make construction loans), and potential economic slowdown due to global economic pressures," Riggs said. "These remain areas to watch."

Findings from latest edition of the RERC/CRE Real Estate Report include:

CBD Office: CBD office remains an investor favorite, with the current high employment rate increasing the need for office space and little construction. Downtowns in Boston, San Francisco and New York are booming.

Suburban Office: The high employment rate also expands the need for office space in the suburbs, resulting in a continued decrease in vacancy rates. However, investors rank the potential for overbuilding in the suburbs much higher than downtown office product.

Hotel: Hotel acquisitions have slowed down. Of all property types surveyed, hotel received the highest risk of overbuilding, especially in Atlanta, Dallas, Denver, San Francisco and Seattle. Increased purchase prices for high-end hotels could have played a role in the REITs' acquisition slowdown.

Retail: With continued confidence in the economy, consumer spending will continue to increase bolstering retail sales, especially on the high-end product. Due to overbuilding, 77 percent of respondents advised selling power centers (risk of overbuilding for power centers reached 7.4 rated on a scale of to 10, with 10 equaling high risk).

Industrial Warehouse: 45 percent of respondents indicated that now is a good time to buy, as strong national growth and low unemployment continues to bolster this property type.

Industrial R&D: While this property type remains strong, investors caution about the possibility of overbuilding, especially in shallow markets that lack resilience during an economic downturn.

Short Bits from Across the Nation

* Atlanta is experiencing strong economic growth, however its market performance is average or below average compared to other large U.S. cities.

* In Boston, the high demand for qualified workers is outpacing supply. High employment rates are helping bolster Boston's apartment market.

* Chicago offers high potential in CBD office and apartment markets, and its industrial market has been experiencing one of the longest periods of continual expansion.

* Development in Dallas is everywhere! Respondents warn of hotel, retail and suburban office oversupply.

* Warning! Denver suburban office market risks severe overbuilding.

* Houston boasts investment optimism in most property types.

* Apartment and industrial markets in Seattle are experiencing shortages.

* Suburban office and apartment properties in Los Angeles have high potential for income and value growth.

Each quarter, the Report provides economic outlooks, investment conditions, anticipated growth rates, income potential, and noteworthy transactions for major metropolitan cities and key smaller markets. For nine property types across the nation, the Report surveys large institutional investors on rates of return, property selection criteria, and investment outlook.

The RERC/CRE Real Estate Report is a joint project between the real estate consulting firm Real Estate Research Corporation (RERC) and The Counselors of Real Estate, an international group of commercial real estate counselors whose professional members carry the CRE (Counselor of Real Estate) Designation. Information in the Report is based on quarterly regional-based surveys of CREs; national-based surveys of large institutional investors; and additional research by RERC.

Individual copies of the RERC/CRE Real Estate Report sell for $55. One-year subscriptions are available for $195. For more information on the Report, contact Real Estate Research Corporation at [phone].