SEATTLE-Ask most investors globally what time it is on theproperty clock for their markets, and they’ll tell you it’s 8:00.That is, the market has passed the trough “hour” of 6:00 and is onits way back up to midnight. However, that doesn’t mean they trustthe fundamentals generally, and that’s largely the reason that 70%of global investors surveyed by Colliers International have noplans for cross-border deals in the coming 12 months, although 60%are looking to expand their real estate portfolios in the nextyear.

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“Compared to earlier this year, the tone is better, but there’sstill a ton of caution,” Ross Moore, Vancouver-based chiefeconomist for Colliers, tells GlobeSt.com. The firm had polledinvestors worldwide at the start of the year; the latest survey,conducted during the third quarter and released last month, shows amodest uptick in bullishness compared to the Q1 edition.

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The cross-border impetus is stronger in Western Europe than inother regions, with 62% of investors intended to do deals outsidetheir native countries. Moore chalks it up to local marketconditions in that region.

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“There was so much price discrepancy between certain Central andEastern European countries and Western Europe, that prompted a lotmore cross-border investing,” he says. “But that was the onlyregion in which we saw that occurring. Most of the surveyrespondents indicated they were going to stick closer to home.”

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Moore notes that for investors, “it’s all a matter of prioritiesand we’re certainly seeing that here. You may be an institutionalinvestor and see opportunities outside your home country, but thevast majority of institutional investors are still trying to repairand fix existing problems. It’s pretty hard to go out and make newinvestments when you have either joint ventures that are fallingapart or properties that need to be recapitalized and debt that youcan’t refinance.”

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He acknowledges that since the survey was conducted in latesummer, there’s been a slight letup in the level of caution, butnot much. At that time, “There was considerable uncertainty withrespect to the recovery and just how sustained and robust it wouldbe,” Moore says. A double-dip recession loomed as a realpossibility.

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A few months later, “there is now less talk of a double-dip,”Moore says. “I’m not sure that we can say Ben Bernanke came to therescue,” but the uptick in sentiment did largely coincide with theannouncement of a second round of quantitative easing in earlyNovember—an event of which most investors would have had littleadvance knowledge.

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That being said, the continued uncertainty is reflected in thesurvey’s finding that most investors don’t see much movement oneway or the other in cap rates over the next several months. “Whatthey saw was two opposing forces,” explains Moore. “You had thecapital market side, which was desperate for deals, and when you’vegot Treasuries at 2.3% or 2.4%, and five-year and three-year rateseffectively at zero, everybody was piling into real estate. Even ata stabilized cap rate of 5.5% or 6%, that was still pretty good.The view was that cap rates could continue to trend down.”

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At the same time, says Moore, “you’ve got leasing markets thatwere still really stuck in neutral. The numbers have stabilizedover the past quarter, but nobody is saying that leasing is robust.We do see the leasing markets and capital markets get out of synchwith each other, and the capital markets are almost always wellahead of the leasing markets.”

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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.