"We're in a unique period in the investment market," Robert Young, first vice president of CB Richard Ellis Inc. said at the firm's recent MarketWatch 2003 seminar, held at the Scottsdale Center for the Arts. "It's almost a win-win situation."

Young said about five times the normal amount of capital has moved into the Phoenix real estate market as investors, wary of a shaky stock market, search for solid real estate deals in which to place their money. But the influx of capital has been countered by a scarcity of product which has resulted in multiple offers, higher prices and lower capitalization rates, he said.

Retail and industrial net-leased properties, especially those with long-term single tenants, are the Valley's hottest investment commodities with many being scooped up even before they hit the market. But the surge in demand has had its drawbacks, sending capitalization rates to below 8%.

Anchored-neighborhood shopping centers also are popular, Young said. The demand for those types of investments, and the shortage it has caused, has helped fuel an increase in sales of power centers, he noted.

The hot investor demand is not about to wane in 2003. Buyers of both single- and multi-tenant properties will remain aggressive, causing capitalization rates to remain at historic lows. But as interest rates rise, as they are expected to do in the next two years, capitalization rates should return to normal levels, Young said.