|
|
 |
25 October 2000
Lend Lease Real Estate Investments and PricewaterhouseCoopers issue Emerging Trends in Real Estate 2001
NATION’S REAL ESTATE LEADERS SEE STABLE, ATTRACTIVE RETURNS AHEAD FOR COMMERCIAL PROPERTY INVESTMENTS
“More Tortoise…Less Hare”
NEW YORK, (October 25, 2000) -- Commercial real estate experts are expecting stable, attractive risk-adjusted investment returns for the next year and beyond in most regions and for most property types, according to Emerging Trends in Real Estate 2001, the annual survey of leading real estate experts. Those interviewed expect industry-wide unleveraged real estate returns of approximately 11 percent for the year, with REIT stocks rebounding to 12 percent after taking a drubbing in 1998 and 1999.
Emerging Trends is written and published jointly by PricewaterhouseCoopers and Lend Lease Real Estate Investments. It is based on in-depth interviews of more than 150 leading real estate authorities.
Subtitled “More Tortoise, Less Hare,” Emerging Trends reports that respondents believe that the last 15 years of volatility have largely ended, and that – with the exception of certain property types such as limited service hotels and power centers – investors should look forward to steady annuity-plus level returns that may prove extremely attractive during a period of capital markets volatility.
The report states, “Real estate fundamentals appear relatively sound, underscoring a consensus view that supply-demand balance in most markets will hold for the next three years or more.” Also, “For the most part, next year’s real estate investors need to relinquish fantasies of growth-oriented performance and embrace more traditional enhanced-income returns. At this point in the cycle, income and income growth – not total return – will drive performance.”
As in the last few years, the survey places “24-hour cities” such as San Francisco, New York and Boston at the top of its list of cities recommended for investment, citing strong local economies, high demand for space, high rents, continued low vacancy rates and significant barriers to new construction. Cities such as Detroit and St. Louis, which continue to be seen as 9-to-5 markets, are less desirable, as are Dallas-Ft. Worth and Houston, whose lack of development constraints make them more risky.
The report spotlights the emergence of “Subcities” such as Atlanta’s uptown Buckhead neighborhood; Reston, Va.; Bethesda Md.; Bellevue, Wash; Walnut Creek, Calif.; and Birmingham, Mich; -- suburban locations that are evolving into 24-hour markets and therefore becoming attractive investment targets.
Overall, respondents identify downtown office, apartments and industrial properties as their favorite investments, indicating the strongest inclinations to sell limited service hotels and retail power centers. They favor holding onto, but not adding, full service hotel and top regional mall investments (fortress malls) for now.
Copies of Emerging Trends in Real Estate 2001 are available for $95 by calling Lorna Butts, 301-897-4629 or Bonnie White, 212-554-4168. They also can be obtained by emailing requests to emergingtrends@lendleaserei.com. or lorna.butts@us.pwcglobal.com.
With a worldwide network of 7000 professionals, PricewaterhouseCoopers' Financial Advisory Services ("FAS") practice provides creative solutions and ideas that increase value to clients during critical periods and when they are making important decisions that define their future. The FAS business is organized along five product lines. The Business Recovery Services, Dispute Analysis & Investigations, and Corporate Value Consulting product lines are the largest in the world. Our Dispute Analysis & Investigations product line was ranked number one in the US by readers of Euromoney's International Commercial Litigation. The Project Finance & Privatization product line rated second in Privatisation International's global league table by number of privatization financial advisory assignments and number one in Project Finance International's global ranking by number of project finance advisory mandates. The Mergers & Acquisitions product line was second in the world in number of deals completed, according to Securities Data Company.
PricewaterhouseCoopers (www.pwcglobal.com) is the world's largest professional services organization. Drawing on the knowledge and skills of more than 150,000 people in 150 countries, the organization helps its clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance in an Internet-enabled world.
PricewaterhouseCoopers refers to the member firms of the worldwide PricewaterhouseCoopers organization.
Lend Lease Real Estate Investments (www.lendleaserei.com) is one of the largest real estate investment managers in the world and a leading U.S. real estate advisor to pension funds. The company has $41 billion in real estate and commercial mortgages under management for institutional and private clients in the US. In addition, the Group services some $56 billion of commercial real estate loans.
On a worldwide basis the Lend Lease Group is an integrated real estate funds management and services business comprising funds management, project management and construction and property development. In real estate funds management, Lend Lease provides equity and debt origination and management, in public and private markets, and manages $48 billion on behalf of clients globally. Lend Lease provides project management and construction services in almost 40 countries, usually on a fee for service basis, for a blue chip client base with a high level of repeat business. In property development, Lend Lease has expertise in commercial, retail and complex urban mixed use developments, with a strong retail focus, in Europe, Asia, Australia and the US, utilizing primarily third party capital.
Lend Lease Real Estate Investments, Inc.
Contact: Jonathan Miller
(212) 554-1967, jmiller@lendleaserei.com
PricewaterhouseCoopers LLP
Contact: Juliet Arrieta
(212) 597-3587, juliet.arrieta@us.pwcglobal.com
Rubenstein Associates, Inc.
Public Relations
Contact: Rick Matthews
(212) 843-8007, rmatth@rubenstein.commedia
|