SAN FRANCISCO, NOV. 4, 2009 —Investors are seeking to purchase more commercial real estate in the United States than they had planned in 2009, and appear to have their sights set on the multifamily sector, as more than two-thirds of respondents (70 percent) to Jones Lang LaSalle’s Fall 2009 Cross-Sector Survey believe that sector will perform better than the office, retail, industrial and hotel sectors by as much as 30 percent.  This is a marked change from a year ago, when 67 percent of respondents predicted the multifamily sector would underperform relative to the other commercial real estate sectors by that same amount.

 

Jones Lang LaSalle’s fall survey of nationwide property owners, development firms, investors and service firms was completed by attendees of the Urban Land Institute’s Fall Conference this week in San Francisco.  The survey is conducted bi-annually in the spring and fall with comparative results provided in the following findings.

 

“It’s clear from the results of our survey that the attitude towards multifamily has completely changed in the past year.  Financing from Freddie Mac and Fannie Mae has certainly bolstered the viability of this sector, but we’re also seeing buyers and sellers begin to come closer to a common ground on pricing discovery in the multifamily product category,” said Dave Doupé, managing director of Jones Lang LaSalle’s West Coast Capital Markets team at Jones Lang LaSalle.

 

Overall targeted investments into the commercial real estate sector are expected to increase in 2010 as 94 percent of respondents said they planned to increase their overall investment or development activity next year, which is up from 2009, when two-thirds of the respondents predicted an investment increase.

 

“The percentage of investors interested in multifamily product represents a dramatic rise from last year, when two-thirds of the respondents predicted a decrease in multifamily investment activity,” added Jubeen Vaghefi, managing director of Jones Lang LaSalle’s multifamily practice.  “Student housing, apartment assets and even seniors housing should all benefit from the added interest in 2010.”

 

While the multifamily sector stands poised for a comeback in 2010, the survey results remain tepid for the rest of the commercial real estate sectors.

 

“There is little doubt that there are attractive investment opportunities available in the real estate asset class, with both distressed assets and available core assets presenting a prime opportunity for investors in the coming year.  As both buyers and sellers become more comfortable with the market pricing available today, we expect to see an uptick in general trading activity.  While the road to recovery still has its challenges, these survey results tell us investors are poised to take advantage of attractive market fundamentals and are planning to begin with significant multifamily investment in 2010," said Noble Carpenter, managing director of Jones Lang LaSalle’s Real Estate Investment Banking team.

 

Jones Lang LaSalle Capital Markets is composed of a broad range of real estate investment debt and equity specialists, and corporate finance experts, working on all property types and in all the major national markets on behalf of major institutional and local investors and developers, as well as corporations.  The firm's Capital Markets professionals are highly skilled at pinpointing and tailoring the right capital solutions for each of these client's needs.  The Development and Asset Strategy team specializes in the sale of non-income-producing properties in their various forms from surplus buildings to raw land to entitled parcels and partially completed subdivisions.  The Investment Sales teams assist investors in developing and executing asset recapitalization strategies for office, industrial, retail, multifamily, healthcare and seniors housing product. The firm’s Real Estate Investment Banking experts raise debt and joint venture equity for investors and developers, and provide derivatives structuring and loan sale advisory services.  The Corporate Capital Markets professionals help corporations develop and execute strategies that bridge their occupancy, capital deployment and financial reporting objectives for their facility portfolios.  The firm's Value Recovery Services assist clients affected by the current financial crisis by creating value while managing risks through evaluating operational and occupancy needs, assisting with challenged assets and liabilities on their balance sheets, providing receivership services, asset management, raising capital through sales-leasebacks and providing leasing and recapitalization strategies for distressed assets. In the past two years, the firm’s Capital Markets team handled $117 billion of transaction volume.

 

 

Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2008 global revenue of $2.7 billion, Jones Lang LaSalle serves clients in 60 countries from 750 locations worldwide, including 180 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.4 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $37 billion of assets under management. For further information, please visit our Web site, www.joneslanglasalle.com.

 

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