Reached Its Peak
Author: Diana Heeb Bivona
A survey of industry executives by the Wall Street Journal found that many believe the commercial real-estate cycle has reached its peak and will begin pulling back in 2007. The survey points out that commercial real estate is beginning a return to its norm as an income-producing investment rather than the wildly appreciating asset class it has been in the last ten years.
Yet, executives surveyed stated that they expected commercial real-estate cash flow to continue to grow as factors such as reduced vacancies and higher rents kept improving across most property types. Higher construction costs were cited as putting a damper on new construction.