Risks Continue to Hinder Commercial Real Estate Investment Activity

As for commercial real estate, now is the time to invest. But according to a report released Friday by the ""CCIM Institute"":http://www.ccim.com/ and the ""Real Estate Research Corporation"":http://research.rerc.com/, both based in Chicago, various risks are hindering commercial real estate investors from doing so.
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""There are many 'divides' that still separate commercial real estate investors from opportunities,"" said Richard Juge, the 2010 president of the CCIM Institute. ""The recovering economy versus high unemployment, tight debt markets, return versus risk, sellers versus buyers, and prices versus value-all are factors that we'll be looking at closely over the next several months.""

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According to the report, RERC/CCIM Investment Trends Quarterly, there are various risks to commercial real estate investment, including the low space demand caused by high unemployment, vacancy rates increasing and rents declining throughout 2010, banks keeping tight reins on lending and not releasing distressed properties, interest rates expected to increase this fall, and investors missing the inflection point or low period for buying.

Ken Riggs, chief real estate economist of the CCIM Institute and president and CEO of Real Estate Research Corporation, said recovery in the commercial real estate market will vary by geographic location and property type, but for investors seeking to seize market opportunities, 2010 will be the best time in generations to buy well-priced, quality commercial real estate. He said investors should view 2010 as a once-in-a-lifetime opportunity to snag key long-term investments.

""Who is buying commercial real estate? Private funds are the powerhouse buyers,"" Riggs said. ""Also active are the cash-rich or high net worth investors, large institutions and groups, REITS, foreign investors from Canada, China, and Germany, and opportunistic buyers.""