Globally, Brazil tops the rankings in expectations about rentsand values. By contrast, the US ranks near the bottom, with onlythe United Arab Emirates and Japan taking comparably dourassessments. Regionally as well, industry members in the USmaintain a negative outlook, coming in with the lowest expectationsfor about values and rents and coming in second only to CentralAmerican professionals when it comes to a downbeat view of tenantdemand and investment activity. Brazil is at or near the top of thecharts in all four indicators; other Latin American nations thatscore high include Argentina, Peru and Venezuela. "Our membershipanticipates hot spots, and Brazil and its neighbors are inspiringattention," Matt Bruck, the New York-based managing director ofRICS Americas, says in a release.

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Naturally, Brazil's sunny outlook is grounded in recentexperience. According to the quarterly RICS Global Property Surveyreleased earlier this month, Brazil led the way for investmentsales rebounding. Sixty-one percent of survey respondents saidthey'd said an uptick in property sales during the fourth quarterof 2009, compared to 29% in Q3. In second place globally was China,with 58% of respondents saying the same thing. "With low interestrates and relatively high yields, investors have returned" toBrazil, according to RICS.

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Tenant demand in Brazil remains high, even though the vacancyrate crept up in '09—to a level many US markets wish they had."Vacancy has increased to 6.6% after reaching 5.5% in 2008," EquityCapital's Rodrigo Abbud says in a release. Those strongfundamentals have had a positive effect on investment sales. "For2010, the market has started hot," says Abbud. "Tenants andinvestors are looking at projects under construction."

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That assessment squares with a recent Cushman & Wakefieldreport on the Americas. "From a general business perspective,Brazil is seen as a top destination for foreign investment andappears to be poised for an outstanding year," according toC&W. "Commercial real estate remains a major area ofopportunity in the main CBDs, but given the extremely high foreigninterest to invest, as well as strong interest from local players,cap rates are starting to compress," a process which may acceleratethis year. Higher office vacancies could occur in Sao Paolo, wherea sizeable amount of new product will enter the market in the nextfew years.

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C&W says industrial real estate is "still relativelyuntapped" in Brazil, with pent-up demand for space that is likelyto rise in the next few years. Retail, by contrast, "seems to becrowded by new players" in the shopping-mall arena, but smallerformats are still relatively untapped.

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According to RICS, "there may be glimmers of recovery" farthernorth. "Mexico will see rents stabilized by the end of Q2 as demandfor industrial and retail space increases triggered by therecovery," Oscar Franck, managing director of IRR de Mexico, saysin a release. "Mexico's economy is tied to the economic behavior ofits northern neighbor. It would not be a surprise to find rents andyearly increases going back to previous levels by early 2011."

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Similarly, C&W notes that the Mexican economy is projectedto grow much faster this year than it did in '09, with currentestimates for growth at about 4.0% to 5.0%. "Overall, there islikely to be more investment activity in 2010 than in 2009,"C&W says. "The combination of a recovering US economy and thecheaper peso is expected to boost the Mexican real estate market in2010."

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In its Americas report, C&W predicts continued weak demandfor Canadian office markets in the near term, with vacancy ratescontinuing to rise. "Still, some markets are experiencingunexpected demand resilience, with a slowing of sublet space beingreturned to market," C&W says. "Central Calgary and Torontowill continue to see available space rise faster than other majormarkets, which is attributable to the completion of new officetowers, not weak demand fundamentals."

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.