| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Property Last Updated: Aug 11, 2011 - 8:29 AM


Robust commercial property returns in the US amid market turmoil
By Finfacts Team
Aug 11, 2011 - 7:14 AM

Email this article
 Printer friendly page

Amidst the budget deficit debate and the seemingly endless crisis affecting the Eurozone, US commercial real estate quietly delivered a positive return of 4.3% in Q2 2011, according to the IPD US Quarterly Property Index.

Capital values increased by 2.8%, an improvement over the 2.2% growth experienced in the first quarter. To date, the US property market has recovered 13.6% of the 33.6% of value lost during the downturn. Initial yields fell slightly during the quarter, to 5.6%, but remain competitive, with the yield on the benchmark US 10-Year Treasury bond averaging 3.2% over the quarter.

“The next quarter is going to be an important barometer for US commercial property markets, given the uncertainty introduced by Standard & Poor’s downgrade of US sovereign debt and the vigorous debate in the US congress over the strategy for reigning in growing budget deficits,” said Jim Valente, director of Performance and Risk Analytics at IPD, the London-based property index firm.

“However, the market has been aware of the potential downgrade of the federal government’s credit rating to AA+ for quite some time. As a result, after an initial correction, the downgrade is unlikely to have significant long-term effect, unless it results in wider spread downgrades of related entities and important partners (other governments) whose growth is closely tied to the cost of credit and economic growth in the United States.”

Washington D.C. offices suffer Government uncertainty: Washington D.C. office returns, though still strong, moderated over the past two quarters, after posting the highest returns in the index throughout 2010. Capital values in the metro area grew by 3.0% in the second quarter. At the same time, West Coast office markets saw their recovery in capital values accelerate, primarily in San Francisco and Los Angeles, where values grew by 5.0% and 3.4% respectively in the second quarter, versus 4.0% and 1.3% in Q1.

Valente continued, “The moderation of performance in the Washington D.C. market is twofold, partly the result of the re-pricing sequence running its course, but also due to slowly growing concern over potential long-term structural spending cuts by the Federal Government, the primary driver of the local economy.”

New York apartments lag those of San Francisco: Despite the recovery of rents in the New York apartment market, the highest total returns for residential property in Q2 2011 were found in San Francisco, which delivered a total return of 6.6% for the quarter. New York was tied with Washington D.C. in second place with both markets posting total returns of 5.5% in Q2.

Retail Underperformance: Retail performance was muted during the quarter. Capital values grow by only 1.8%, and, combined with an income return of 1.5%, delivered a 3.3% total return. Within the retail sector, neighborhood shopping centers and power centers experienced the strongest growth in capital values, at 2.8% and 2.6% in the second quarter.

“Given continued weakness in the housing sector and jobs market it is not surprising that the retail sector is lagging the recoveries being experienced in the other property sectors,” concluded Valente.

The IPD US Quarterly Property Index measures $96.5bn at the ownership share of the properties in predominantly core open-ended funds.

Related Articles
403 Forbidden

Forbidden

Execute access is denied.


© Copyright 2011 by Finfacts.com

Top of Page

Property
Latest Headlines
Price/Earnings multiple for Dublin houses is double 1993 level
Residential property rents up almost 10% in Dublin in past year
Irish Government and vested interests lobby for easing of Central Bank's mortgage rules
Ireland tops global property price rankings six years after bust
Number of Irish mortgages paid in 2014 at 1974/75 level - a 40 year-low
Irish construction PMI survey confidence measure highest since 2000
Irish mortgage arrears decline; 38,463 BTL accounts in arrears
Irish Housing: Renting provides less security than ownership, unpredictable rents
Ireland: NAMA to redeem €1bn of senior bonds; Fund Boland’s Mill site development
Ireland: 35,000 social housing units by 2020 achievable; Rental market possibly not
Dublin house prices up 24.1% in year to October 2014
Irish home ownership to fall due to affordability
'Tara Collection' of office buildings on sale in Dublin for €263.8m
Irish Housing Rents 2014: Dublin just 10% short of 2007 bubble peak
Irish Economy: Residential mortgage approvals in 2014 as low as in 1977
Irish Construction: Fastest rise in new business for decade - not level of activity
Biggest US individual landowner responds to tax breaks in Ireland and UK
Irish commercial property annual return to September 2014 at 36.6% - income at global high
NAMA expects surplus of less than €500m - it's not a profit; 88.5% sales to US investors
NAMA selling 588 Dublin apartments - name withheld in announcement
Irish House Prices 2014: Dublin rise eased to 23.4% in 12 months to September
Fastest rise in rate of Irish house building since 2000 - do not confuse with activity level
Dysfunctional development land systems in UK and Ireland - Part 2
New Irish mortgage rules suggest most house buyers will need a 20% deposit
Dysfunctional development land systems in UK and Ireland - Part 1
Irish House Prices: Asking prices in Dublin an average rise by average of 25%
Irish commercial property sales set to top 2006 bubble peak
Irish House Prices: National prices up 14.9% in year to August; Dublin prices surge 25.1%
Dublin prime office rents set to return to most expensive in Europe ranks
Dublin 6 postcode area most popular area to buy a property in H1 2014
Irish construction confidence near record-high in August but no PMI firm data
Irish mortgage approvals at 22,400 in year to July 2014; Lowest since 1974
Irish House Prices: Dublin prices up 23% in 12 months to July 2014; Rest of Ireland gain 5%
Irish House Property: Cash purchases accounted for 35% of transactions in Q2 2014
Irish students face rising rents and 40% fewer properties available
Irish home mortgage loans issued in Q2 2014 at annual rate rose to 1974 level
Irish Construction PMI: "Fastest rise in new orders since 2004"; Activity very low
ESRI says Irish houses undervalued up to 27% - Maybe or not?
Up to 60,000 new housing units will be needed in the Dublin area by 2021
Ireland: More young people rented when rents fell during bust