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| Real Estate & Land |
Fertile Assets
Michael Verdon
06/01/2004
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Hall, whose holdings range from Texas office parks to
Napa Valley wineries, explains that three national trends—inflation, interest
rates and capital flow—affect the market. Despite the bullish climate in
commercial real estate, he says he does not have a clear handle on the future.
“It’s a very confused time right now,” he says. “This is the only time that I
can recall when fundamentals in commercial real estate have deteriorated, but
property values have remained steady or gone up.”
With this stream of
willing buyers, the values of both residential and commercial properties
continue to rise, despite languishing vacancy rates in many markets and other
signs that fundamentals are not robust. “There’s a tremendous amount of capital
looking for product,” says Charles Lowrey, CEO of Parsippany, N.J.-based
Prudential Real Estate Investors, which provides financial services to
institutional investors and affluent individuals. “The question is whether
capital flows will continue to overwhelm the fundamentals, as they have over the
past few years.”
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