Record High Commercial Real Estate Investment
SOURCE: Wall Street Journal
A study released July 18 by Jones Lang LaSalle Inc., a Chicago-based commercial-real-estate services firm, found that investment activity in commercial real estate surged to $382 billion in the first half, up 16% from $328 billion a year ago. The study tracks investment in existing commercial real-estate assets (excluding multifamily properties) that sell for more than $5 million but doesn't include company buyouts or new development.
Jones Lang LaSalle projects a slowdown in sales activity in the second half of the year to about $318 billion, which would be the lowest six-month tally since 2005. The projected slowdown reflects the rising cost of borrowing money to finance highly leveraged acquisitions and the expectation that "flipping," a practice in which investors buy buildings expecting to resell them quickly at a huge profit, is unlikely to continue.
"We'll look forward to seeing how accurate this prediction proves, with many other commercial real estate indicators looking positive for the second half of the year."
-- Steelhead Capital
A study released July 18 by Jones Lang LaSalle Inc., a Chicago-based commercial-real-estate services firm, found that investment activity in commercial real estate surged to $382 billion in the first half, up 16% from $328 billion a year ago. The study tracks investment in existing commercial real-estate assets (excluding multifamily properties) that sell for more than $5 million but doesn't include company buyouts or new development.
Jones Lang LaSalle projects a slowdown in sales activity in the second half of the year to about $318 billion, which would be the lowest six-month tally since 2005. The projected slowdown reflects the rising cost of borrowing money to finance highly leveraged acquisitions and the expectation that "flipping," a practice in which investors buy buildings expecting to resell them quickly at a huge profit, is unlikely to continue.
