CRE market conditions positive to start year

Commercial real estate conditions may improve this year.

More property management companies may feel confident in commercial real estate recovery in the coming months, as conditions strengthened in multiple segments.

A heightened amount of interest in the commercial real estate market may come from private equity firms, as this has surfaced as a trend recently, according to the 2013 Commercial Real Estate Sector Outlook from CIT Group. In the past, pension funds and companies working in the insurance sector were more active in the commercial market. However, private equity companies are getting involved with real estate investment trusts, and privatizing these entities.

Distressed properties also experienced a heightened interest from investors, the report noted.

"During the Great Recession there were many ventures in the urban core of cities that had significant investment in them, but were stopped mid-stream," said Matt Galligan, president of CIT Real Estate Finance. "These projects often were acquired below replacement cost from the original developer and provide very good lending opportunities if the new business plan is sound."

Many investors are taking advantage of these properties through multiple projects, the report added. There also is an increased level of interest in multifamily properties that are not considered top-tier.

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