CRE investment falls slightly in 3Q.

Author:Tucker, Michael
Position:Commercial - Commercial real estate - Statistical data

Direct investment in U.S. commercial real estate (CRE) fell to $44 billion in the third quarter from $47 billion in the second quarter, according to Jones Lang LaSalle, Chicago.

But Josh Gelormini, vice president of Americas research with Jones Lang LaSalle, said he expects activity "to reaccelerate by midyear 2013 and reach up to 25 percent growth on 2012 volume."

He added, "After some potential year-end volatility around the U.S. elections and the near-term fiscal cliff, it will again be clear that commercial property in the United States--and more broadly in much of the Americas region--will be seen as attractive and somewhat safer relative to other asset classes and geographies around the globe."

New York remains at the top of the list for foreign investors, Jones Lang LaSalle reported, followed by Los Angeles, Washington, D.C., and Boston.

Both Silicon Valley and the Oakland--East Bay market in California saw dramatic cross-border purchase volume increases in the third quarter, said Steve Collins, international director with Jones Lang LaSalle Capital Markets. The Silicon Valley market moved from No. 23 a year ago to No. 5, while the Oakland--East Bay market moved from No. 30 to No. 6 in the same period.

"As values continue to increase for most sectors, overall volumes continue to hold up in a difficult environment even as the supply of core investment options in primary markets remains relatively limited," Collins said. As such, recent transactions increasingly include core product in secondary markets where the spread in yield can be as much as 150 basis points...

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