For the first time in the 25-year history of the joint study, grocery-anchored shopping centers are expected to provide the highest return with the least amount of risk among 10 asset classes tracked. "They sell quickly, and they sell at low [capitalization] rates," Korpacz notes.
Those may be two reasons to put those assets on the market, he adds. "This is a good time to sell," Korpacz says. "They're too pricey, and Wal-Mart is becoming too huge."
Multifamily properties have produced negative returns just once since 1983, Schwanke reports. However, Korpacz adds that industry leaders point out the sector is the darling of a large pool of investors, who have driven down capitalization rates.
The coming year will likely see an increase in foreclosures and mortgage delinquencies, according to "Emerging Trends in Real Estate," but vulture-like buyers who have been anxiously holding cash may be disappointed. Distressed sellers can lessen their pain by taking advantage of the relative lack of deals on the market, as well as an abundance of capital, Korpacz and Schwanke suggest.
While the local market is hardly an indicator, Korpacz says developers seem to have two choices in 2004, according to the report. Those options, he says, are "Go to the beach or play golf."
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