Akerman Senterfitt: Optimism Abounds Among RE Execs

Close to 300 leaders in CRE development, investment and financing participated in the fourth annual Akerman U.S. Real Estate Summit held in Miami, taking part in industry discussions and a brief survey about the outlook for the industry and the future of the U.S. economy.

The fourth annual Akerman U.S. Real Estate Summit was held on April 12 in Miami, as close to 300 leaders in commercial real estate development, investment, and financing took part in industry discussions and took a brief survey about the outlook of the industry and the U.S. economy in 2013 and beyond.

Among the topics presented in the survey and talked about at the summit, were the greatest challenges affecting the industry, the state of the global markets, opportunities presenting value for investors, the outlook for the capital markets, and the role of private equity investment.

“The key findings for us and really anyone you talk to in real estate these days is increased optimism among the C-suite real estate executives,” Eric Rapkin, shareholder for Akerman Senterfitt, told Commercial Property Executive. “While everyone would agree not everything is rosy, the feeling of optimism and that translating into transactions is very clear.”

The survey found that 86 percent of those who attended the event were more optimistic about the commercial real estate market in 2013 than they were a year ago. Contributing to and driving the optimism is the availability of capital because of low interest rates for multiple sectors such as multi-family, hospitality, retail, office and industrial. This follows almost three years of almost no available capital.

Approximately 60 percent of respondents singled out multi-family development as the most active market sector with 55 percent believing that the sector will return to pre- recession levels by the end of the year.

“I think it’s interesting because while multi-family seems to have recovered tremendously, different experts may think that perhaps we’re in a bubble for how hot that sector is,” Rapkin said. “But something about our mobile society and home ownership is being the marker of the American Dream is less important to younger people. After the stain of the mortgage collapse, I think people are not as excited about home ownership as they used to be.”

According to Rapkin, an influx of foreign buyers factored as the third largest reason why confidence levels increased in 2013, with 31 percent of real estate executives saying foreign investors will fund a significant portion of commercial real estate debt and equity in 2013, and 60 percent believing that foreign investors will contribute largely to the development of multi-family homes.

Despite improved confidence by senior real estate executives in the economy and the availability of equity capital investment, clouds of uncertainty do remain over lawmaker decisions in Washington, D.C.

“Sequestration is the latest example of government uncertainty affecting all of the real estate decision makers’ outlooks,” Rapkin added. “We’ve had an overall gridlock in D.C. for years affecting everyone’s attitude. As we were moving into a bumpy recovery, we had all this debate over the stimulus, then we had the fiscal cliff, now we have sequestration. It’s too early to tell if it will have an affect.”