Capital markets will be better next year

Two-thirds of all senior real estate professionals believe access to capital will be better one year from today, according to the latest US Real Estate Roundtable survey. However a third warned values would be lower next year compared with now.

Two out of three senior real estate executives believe capital markets will be better by late 2009 compared with today, according to the latest survey from the US Real Estate Roundtable.

Sixty-four percent of respondents said the debt markets would be “somewhat” or “much” better in 12 months time, against a third of executives (29 percent) who feared access to capital would deteriorate over the next 12 months.

The fourth quarter sentiment survey by the US trade body, which represents chief executives in the commercial real estate industry, however warned that real estate valuations would continue to fall over the next year, with 27 percent of executives questioned saying pricing would be “much worse” in 12 months than they are today. A total of 68 percent of those questioned felt values would be lower this time next year.

The survey also revealed that confidence had plummeted since the last report, published in August. Half of all executives now feel the market is “much worse” than a year ago, compared to 28 percent in the summer, it said.

“Real estate is now experiencing a seismic liquidity shock. Even though loan delinquencies in the sector are very low, the ongoing lack of credit and drop in asset values has paralyzed the market,” said Roundtable president and chief executive officer Jeffrey DeBoer in a statement. 

The survey questioned near 100 executives, including Devin Murphy, managing partner of Coventry Real Estate Advisors; Robert Larson, chairman and managing principal of Lazard Real Estate Partners; Dennis Lopez, chief executive officer of Sun Real Estate; and David Reilly, president and chief executive officer of Cornerstone Real Estate Advisers.