CHICAGO-Not only has commercial real estate bucked the current recession, the effects of the Sept. 11 terrorist attacks on the US failed to slow deal flow, according to the CCIM/Landauer Investment Trends Quarterly. With average deal prices above $10 million, and a median price of $13.2 million, large investors are staying in the game, the report suggests.

The average capitalization rate rose 20 basis points to 9.6%, which CCIM/Landauer suggests is a sign investors are confident about future returns and prices.

The availability of relatively inexpensive capital is helping fuel the national market, CCIM Institute president Darbin T. Skeans says.

“The decline in interest rates pushed by the Fed provided exceptional opportunities for buyers to use the positive leverage available in the 200 basis point spread between the average cap rate and cost of borrowed funds,”. Skeans explains. “One key difference between the current economic downturn and the recession of the early ’90s is that there is a very efficient commercial mortgage-backed securities after-market for debt instruments.

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