Speaker Stephen Blank, of the institute, pointed to some of the key points of the study, which included the fact that while it is a good time to sell non-strategic assets, such sales will lead to the question of where to re-invest.

He noted that while investments are hot in what he termed the Big Four--Washington, DC; Southern California; South Florida; and New York City, "There is a growing concern about investing in a lot of other markets," he said, noting that questions arise about "in-migration, job growth and exit strategies," in those secondary locales.

So where are the best bets for investment and development in 2005? According to the study, "It's a great time to weed out non-essential assets," said PwC's Peter F. Korpacz. Also, "Hold some powder," he continued. "As some markets improve, there might be additional opportunities."

In the meantime, "Consider buying in former high-tech hotbeds," that offer great space and a savvy employment base. "Economists are speculating that the tech sector is about to make a resurgence," Korpacz offered.

In terms of development, he said that niches--such as student housing--are a good bet for the foreseeable future, but as interest rates rise, condominium starter homes might be good to avoid.

Broken down by property sector the report indicates that "hotels are back," Korpacz stated. "They're good to by; they're good to hold." Retail, on the other hand, is totally overplayed, and "there are concerns about how long consumers can continue to spend. We are definitely over-stored."

Continued influx of capital against the backdrop of an improving economy is the over-riding trend of Emerging Trends. But there is one caveat, according to principal author Jonathan Miller of GMAC: "Real estate and finance are both very susceptible to shock--by the Fed, the ongoing deficit, Iraq and the threat of terrorism. All could spark an interest-rate spike. That's why we're advising to hold some of your powder."

Instant Insights /

Emerging Trends '05: Expect More of the Same

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