PREA survey: Multifamily will offer highest returns for 2002

A survey of approximately 120 real estate professionals by The Pension Real Estate Association (PREA) reveals that 35% of respondents believe the multifamily sector will offer the highest property returns in the coming year, while 30% favor retail and 21% give the edge to the industrial sector. Only 14% of respondents believe that office properties will offer the best returns over the next 12 months.

The survey was conducted at the PREA Spring Conference in Washington, D.C. in March, and included representatives of corporate and public retirement plans, endowments, foundations, real estate managers, REITs and consultants.

Among other survey highlights:

• A majority (56%) of the survey group believes that real estate allocations will hold steady this year while 37% expect increased allocations and just 7% forecast a drop in commercial real estate funding among investors in 2002 vs. last year.

• A majority of the group (55%) believes that real estate valuations will increase by the end of 2002 while 45% believe a drop in values is likely.

• The large majority (73%) believe that North America offers the best investment opportunities for the next two to three years while just under 12% will be looking to Asia for prospects. Beyond North American and Asia, investors will look to South America and Mexico (10%) and Europe (5%) for investment opportunities.

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