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Energy Production Boom Enhances Office Investment Opportunities, by CBRE
The increase in domestic energy exploration and production will spur office investment opportunities in U.S. markets like Dallas, Pittsburgh and Oklahoma City, says the CBRE 13 Trends for 2013 report. Another key trend of note is the potential contribution of an aging population to apartment rent growth and multihousing demand during this decade.
According to CBRE, other key trends for 2013 include:
- Cap rates will remain relatively unchanged in 2013, as a result of loose federal monetary policy, the continuing recovery in both debt availability and real estate fundamentals, and stability in risk premiums.
- The outlook for manufacturing remains healthy as the U.S. economy continues to gain traction, with industrial production forecast to reach its pre-recession high by the end of 2013. Continued improvement in business and consumer demand will see more need for industrial space throughout the entire supply chain. Higher levels of production will drive manufacturing businesses to expand their access to warehouse space.
- The property pricing gap between suburban office assets and downtown properties will narrow. There are early signs that spreads are narrowing, first through near-term stabilization of cap rates in the suburbs, and then in later years through compression. During 2013 and 2014, investors will gradually increase their risk appetite and venture beyond cities’ central urban core.
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