DENVER-Despite the softening local commercial market, investors remain eager to snap up commercial real estate properties in Denver, Mike Winn, a senior director and investment broker at Cushman & Wakefield of Colorado Inc., tells

Winn, who holds chemistry and biology degrees from Colorado College, was a top investment broker at Grubb & Ellis Co. before joining Cushman. “Denver is still perceived as the land of opportunity,” Winn says. “Nationally, we are still a Top 10 market in the country. A lot of markets have fallen off where investors want to place capital since the economic downturn began. I would submit that the perception is worse than the reality.”

Investors, he says, see Denver rebounding faster than most cities. In addition to Denver, cities that investors, to varying degrees, still like include New York City, Washington, DC, Boston, San Francisco, Southern California, Chicago, Seattle and Miami. They are less enthusiastic about Philadelphia, Minneapolis, Houston, Atlanta, Phoenix, Dallas, Detroit and St. Louis, he contends.

Winn notes that institutional investors look at real estate the way they do investing in stocks or bonds, balancing risk and reward. The local market is suffering from over-leasing, not overbuilding as it did in the 1980s, according to Winn. Also, building owners are better capitalized and lenders are better insulated to weather the downturn than they were during the S&L crash during the 1980s and early 1990s. Spec construction also has been curtailed and low-interest rates will help protect values.

Winn believes sources of capital in the coming year will be abundant, but also discriminating. Private leveraged investors, he predicts, will be the most active. Opportunity funds also will be returning to the market. REITs, he notes, are sitting on mountains of cash and can raise more money easily. It’s still a question mark, however, if pension fund advisers will raise allocations to real estate, he says.

Winn predicts 2002 value levels will modestly dip, but it won’t be a bust like in the late ’80s. Lenders will experience manageable delinquencies and limited foreclosures, and the bid-ask gap for offices, industrial and retail will diminish during the first half of the coming year. Liquidity will increase in the second half when the economy shows its first signs of a recovery, he believes.

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