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PERE Forum Europe 2009: US real estate values to fall by 10% in Q2

In his keynote address on the second day of this year’s PERE Forum: Europe, LaSalle Investment Management chief executive officer Jeff Jacobson said US real estate capital values have fallen by 30 percent in the last three quarters. He expects them to fall by another 10% in Q2 alone.

Real estate capital values in the US should fall by 10 percent in the second quarter of this year from the previous quarter.

This was the prediction of Jeff Jacobson, chief executive officer of Chicago-based LaSalle Investment Management, at the fifth PERE Forum: Europe held today in London.

He told delegates that his firm, the investment management division of listed property services firm Jones Lang LaSalle, had recorded capital value falls of 10 percent per quarter for the past two consequtive quarters and that a third fall in the second quarter of the year was likely.

He said: “For Q2 we are starting to see our initial appraisals and through talking to other [people] I think we are going to see another 10 percent fall. We are going to have 30 percent in write-downs in the US on average leveraged institutional property over the course of three quarters and I think there are more [falls] to come.”

He added: “Our research team does not see a big bounce back.”

As a result, Jacobson said that LaSalle had adopted a “defence” approach to its business, prioritising asset management over investing its equity resources on transactions in the immediate future. He spoke at length about “maximising value” and “taking care of LPs” as areas of current focus.