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CBRE EA Report Identifies 12 Key Trends in Commercial Real Estate

Boston, February 13, 2012 – It may be a little harder to acquire a state-of-the-art, big-box warehouse facility in 2012, while retailers may have to pay slightly more to rent space in a well-located strip mall. And the line for a hotel room may be a little shorter.  Those are among the key real estate trends that CBRE Econometric Advisors (CBRE EA) has identified in a forthcoming new report, “12 Trends for 2012.”

CBRE EA predicts that demand growth for hotel rooms will slow in 2012 as the hotel recovery matures and decelerates and the European economic crisis potentially dampens already-weakened international travel to the U.S.

Conversely, there will be increased demand for large U.S. warehouse facilities, CBRE EA says, because low rents levels are encouraging occupiers to consolidate or upgrade into larger, higher quality locations, pointing to a potential shortage of such space. 

Meanwhile, U.S. retail rents have reached bottom and are poised to rise moderately toward the end of the year says CBRE EA, spurred by absorption gaining momentum as the economic recovery becomes more robust.

“While economic uncertainty still overhangs the commercial real estate environment, 12 trends for 2012 offers a practical, sector by sector, analysis, for owners, occupiers and investors looking for insight that goes beyond ‘conventional wisdom’” said Jon Southard, Director of Forecasting, CBRE EA.

Other key trends for 2012, according to CBRE EA are:

  • Cap rate compression will end and could begin to rise over the next two years because of a subdued risk appetite by investors and continued credit availability limitations.
  • Suburban office market fundamentals will continue to improve, building on the gains achieved in 2011. This trend will defy critics who have sounded the death knell of suburban offices.
  • Trains will continue to displace trucks as a means of moving good across country but the rise of rail will continue to be incremental in 2012. Furthermore, markets that operate on regional distribution axes for medium-to-long-range rail supply routes may witness an increase in warehouse demand, if the price of gasoline keeps the cost of commuting high, and if faster, more efficient trains boost usage rates near urban centers.
  • Distress in the debt markets will reach its peak, but opportunities will continue to abound for some time for nimble investors.
  • The U.S. housing market should see a slight improvement in price trends along with moderate rent growth this year, paving the way for a more sustained recovery in following years.
  • Finance job cuts should end by mid-year as the overall national economy and housing market improves.

Note to editors/journalists: For a full copy of the report email robert.mcgrath@cbre.com  

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue).  The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com
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