A new report by CB Richard Ellis Group Inc. (CBRE) Americas states that U.S. commercial real estate (CRE) will not be harshly impacted by the recent economic turmoil facing this country and the global economies.
According to the report, titled ‘U.S. Deficits, Debt and Commercial Real Estate,’ CRE real estate investors may react differently to current conditions depending on their risk profile. Investors with higher risk tolerance will look for opportunities in volatile markets while more risk-averse investors may delay new transactions. The report adds that while there are early signs in the commercial mortgage-backed securities market that indicates a withdrawal of capital, there is also an ample supply of capital available for core deals, and lending rates should stay relatively low.
‘The U.S. faces multiple challenges, including tepid economic growth, gridlock in Washington, and an unsustainable debt trajectory,’ says Dr. Asieh Mansour, CBRE's head of Americas research. ‘The inability to enact a comprehensive solution to the economic and debt concerns led Standard & Poor's to lower the long-term rating of the US debt from AAA to AA+. While we anticipate continued stock market volatility, commercial real estate will not fare as poorly, because it remains a preferred asset class within a well-diversified multi-asset institutional portfolio.’
