Hard on the heels of the United States’ economic recession, the nation’s commercial real estate market appears to be on a gradual but uneven path to recovery. Increased transaction flow, driven by real estate investment trusts and distressed deals—in turn aided by improved access to debt and equity capital—has helped revive the commercial real estate markets as property fundamentals continue to improve across sectors.
A bright spot in the commercial real estate recovery process is transaction activity, led by REITs, foreign investors and distressed assets. Net positive acquisitions of $34.1 billion by REITs and $6.1 billion by foreign investors have significantly impacted investment recovery post-recession (2008), according to Real Capital Analytics Inc.
Distressed property transactions continue to rise due to improved financing conditions and favorable convergence of bid-ask spreads. Real Capital Analytics data found that during the first half of 2011, distress-driven sales increased 125 percent year-over-year, to $15.7 billion, and comprised 17 percent of total U.S. commercial real estate sales.
Read more...Distressed Debt & Asset Update: Rough Path to Recovery via Commercial Property Executive
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