[IMGCAP(1)]
Part 2 of 2
SAN FRANCISCO-In an earlier story, GlobeSt.com reported on ULI Real Estate Consensus Forecast from ULI's Real Estate Finance and Investment conference here, noting that real estate is much safer for investors than it has been for some time. “It is an attractive environment,” agreed panelists.
The discussion then moved on to the topic of returns, where David Lynn, EVP and chief investment strategist of Cole Real Estate Investments, predicted that, going forward, “a majority of returns will come from income.” According to Lynn, the 8% to 10% total return range is probably there.
Andrew Nelson, director of research and strategy at Deutsche Asset & Wealth Management, added that “We will see increasing NOI growth starting in 2014. We expect to see more income based returns.”
[IMGCAP(2)]
Drilling down to each property type, Richard Sinkuler, partner and global real estate markets leader at Ernst & Young, forecasts a big demand in warehouse. “Office is having a sluggish time recovering,” he said. “Retail is doing well at the high end and the low end, but the folks in the middle are having a tough time.”
In terms of unemployment, there is no more national average, said Sinkuler. “Nothing really meaningful is going to happen until we fix the job situation.”
To be considered unemployed, you have to be looking, he continued. “That cuts behind all the numbers. Don't look at the flat percentage as a national average… Look at the various places where the unemployment growth is taking place.” That growth, he said, is where the demand is coming from. “Demographics is playing more of an important role than it ever has before.”
When discussing the 10-year treasury, Lynn's prediction is that the Fed will scale back gradually “because we have been in this period of free money for four years.” But the change has occurred, he said, but it has to. “They can't continue to stimulate the economy forever, and it will have an effect on cap rates, but that will be gradual as well.”
According to Sinkuler, “The Fed isn't going to do anything drastic. We are going to have stimulus for some time to come, but the question is whether you are going to get the central banks and everyone on the same playing field because everyone is at a different stage in the game and that remains to be seen.”
Check back with GlobeSt.com for more from the ULI Investment conference.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
