Marktbericht USA Oktober 2011

US economic growth looks to be stronger heading into 2012, as some of the early-year headwinds – including high commodity prices and automotive supply chain disruptions – have dissipated. However, weak job and income growth, ongoing household deleveraging, and the tight fiscal posture of many state and local governments will likely keep the growth rate subpar through 2012.

Executive Summary

Macro Themes

• US economic growth looks to be stronger heading into 2012, as some of the early-year headwinds – including high commodity prices and automotive supply chain disruptions – have dissipated. However, weak job and income growth, ongoing household deleveraging, and the tight fiscal posture of many state and local governments will likely keep the growth rate subpar through 2012.
• The weak growth environment makes the US economy susceptible to event shocks. Adverse financial market conditions and increased volatility stemming from the European sovereign debt crisis creates substantial downside risks to the economy.
• Financial market volatility and economic uncertainty have put pressure on real estate fundamentals and created a strong demand for stable, secure cash flows.
• Demand for space is uneven across property types – strong for apartments and hotels, weaker for most everything else.
• With the exception of apartments, new construction will be very limited and should remain so for 2-3 years.

Implications & Outlook for Commercial Real Estate

• Projections for a strong recovery in commercial real estate have been scaled back, with near-term demand growth expected to be tepid at best.
• The weak development pipeline across nearly all segments and markets will foster the property market recovery even with a modest recovery in demand.
• Risk-averse investors continue to seek core assets, sustaining relatively high valuations. However, commercial real estate yields remain attractive relative to risk-free rates.
• Opportunities beyond gateway markets may offer better risk adjusted returns, but meaningful capital flows to these areas have yet to materialize.
• A less aggressive lending market may limit options of borrowers, especially for the riskier portion of maturing debt. This should create opportunities for capital providers of high-yield mezzanine debt and equity.
• Strong recovery in demand and rich pricing for existing apartment assets make development attractive.

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  Marktbericht USA Oktober 2011PRA USQ October 2011.pdf284 Kb