PwC: Investors anticipate opportunities in commercial real estate

By Rob Starr, Content Manager, Big4.com

As 2012 draws to a close and the industry’s recovery progresses, commercial real estate offers varied investment opportunities across each major sector and a diverse number of cities, even though macroeconomic uncertainties still exist, such as the fiscal cliff, according to the fourth quarter 2012 findings of the PwC Real Estate Investor Survey.

According to surveyed participants, yields have compressed too much for well-leased strip shopping centers that some are considering buying value-add in great locations due to a lack of new supply. For power centers, challenges mainly stem from rising Internet retail sales, merchant consolidations, and an inability to easily shrink into urban streetscapes.

The PwC Real Estate Barometer included in the Survey tracks the anticipated performances of the four main property sectors (office, retail, industrial, and multifamily) from 2012 to 2015. For the office sector, even though the sector’s recovery as a whole lags behind other commercial property sectors due to lower job creation amo ng office-space using companies, as well as an evolving work environment, many metros are benefiting from a lack of new supply. As a result, the barometer places 35.2 percent of the U.S. office stock in expansion by year-end 2012. This percentage is expected to grow through 2015.