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NEW YORK CITY-The outlook for real estate investors for next year is positive according to “Emerging Trends in Real Estate 2001,” a survey written and published by Lend Lease Real Estate Investments and PricewaterhouseCoopers. The more than 150 industry professionals surveyed for the annual study expect unleveraged returns of about 11% for the year, with REITs turning in a 12% gain.

The consensus among respondents is that the last 15 years of volatility in the real estate market has come to an end, with two exceptions: limited service hotels and power centers. So-called “24-hour cities” such as New York, Boston and San Francisco offer the greatest opportunities owing to their robust economies, strong demand for space, high rents, low vacancy rates and barriers to new construction. Also regarded favorably are “subcities,” areas that are turning into 24-hour markets. They include the Buckhead neighborhood of Atlanta; Reston, VA; Bethesda, MD; Bellevue WA; and Walnut Creek, CA.

Cities considered less attractive to investors are Detroit, St. Louis, Dallas-Ft.Worth and Houston, so-called “nine-to-five markets,” where lack of development constraints pose risks. The most favored property types for investment are Downtown offices, apartments and industrial facilities, with full-service hotels and fortress malls rated a “hold,” but not a sector worth adding to a portfolio.

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