Investors Ease Concerns About Commercial Property

There was an overall decrease in the negative sentiment felt by North and South American commercial property professionals in the economy during the third quarter of 2009, according to the RICS Global Commercial Property Survey. Respondents were particularly less negative about the office, retail, and industrial real estate markets.

The survey, conducted by the Royal Institution of Chartered Surveyors, shows that in the U.S., commercial property professionals feel investor concerns over the outlook for real estate may be easing. Only a net 24 percent of respondents now expect investors to hold off putting their money into commercial property, compared to the second quarter’s net 43 percent. Compared to the fourth quarter of 2008, this is a significant decline from the net 92 percent of respondents who said then that they expected investors to be reluctant to put their money into property.

But is less of a bad thing a sign of good things to come? “Brokers report little or no improvement in commercial real estate in general,” said Stephen Crosson, MRICS, senior partner of the Dallas advisory firm, Crosson Dannis Inc. “There are many investors ready to purchase, albeit at significantly lower values than sellers are willing to accept.”

Real estate activity in the U.S. appears to be aligned with most other countries in the Americas, although a few South American countries appear to be heading for more rapidly improving property markets, including Brazil, Chile, Columbia, and Peru. Although respondents in those countries reported improving tenant demand, respondents in the U.S. were less bullish and expect tenant demand to remain weak during the fourth quarter.