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New York -- Although the commercial real estate sector is better equipped to handle the impact of an ongoing credit crunch than it has been in the past, returns are likely to be down in 2008, according to a report from Deloitte Consulting's real estate group.
"In prior boom cycles, commercial real estate has responded by overbuilding. The industry has clearly learned its lesson because this time commercial real estate is enduring a credit crunch, not a crisis - partially because it resisted this urge," notes Dennis Yeskey of Deloitte's real estate capital markets practice.
He added that the industry is in a strong position to endure a recession, in the event there is one, and commercial real estate remains a good option for investors seeking portfolio diversification.
He expects capital flow to resume in 2008, ...
Source: HighBeam Research, Credit Crunch May Hinder CRE Markets.