TAMPA, FL-National and global investors continue to favor putting their money into US real estate assets because of their liquidity status, Arthur J. Mirante II, president, Global Client Development, Cushman & Wakefield, told delegates attending the Certified Financial Analyst Conference here.

Mirante says the US is “considered the most transparent and liquid market, with over 200 properties sold in excess of $200 million in 2005.” However, “if interest rates continue to rise and the equity markets improve, it is fair for us to assume real estate’s historical yield advantage over other asset classes will dissipate and eventually there may be a moderation of the capital flowing into real estate,” Mirante told the CFA Conference attendees.

If that scenario should occur, the Cushman & Wakefield executive said he still “does not see this having any meaningful impact on pricing.” He is confident “pricing would remain strong because of the expanding global economy, improving real estate fundamentals and strong investor desire for real estate.”

Mirante is equally confident real estate will be “a preferred investment alternative for the foreseeable future. I see downside protection against the bubble in the large amounts of capital across all asset sectors allocated to real estate and the rapidly improving fundamentals.”

On cap rates, Mirante said they have compressed by 240 basis points in the US in the top eight major office markets. “Despite terrorism concerns,” New York and Washington, DC have the lowest cap rates, the highest price per-square foot and the highest transaction volumes.

This year specifically, investors are targeting San Diego, Washington, DC, Los Angeles and New York City, “with the opportunistic markets of San Jose and San Francisco making the top 10 list,” Mirante said Overseas, London, Paris and Tokyo are the lowest cap-rate markets and “the most favored” by investors, he added.

Additionally, many investors are looking for higher yields in “the not so transparent, hyper-growth economies” such as India and China or in secondary cities and markets of developed countries, the C&W executive said.

“There continue to be significant structural differences between countries in terms of leases, tax and legal structures, transparency and liquidity,” Mirante pointed out. “It is this variety in global real estate markets that creates pockets of opportunity which should allow the best informed investors to outperform the pack.”

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