Real estate market shows ‘flight to quality’
PwC Real Estate Advisory Director Aaron Pinet said commercial real estate is recovering, although not through the broad-based rebound many market participants expected. Pricing has become more stable, he said, but investors still need a credible, property-level growth case before accepting real estate risk.
Capital markets are functioning better than transaction-market headlines may suggest, Pinet said. Commercial mortgage-backed securities issuance is ahead of last year’s pace, and investment-grade real estate investment trusts continue to access unsecured debt markets. Still, debt costs and interest-rate protection costs remain elevated.
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