Multifamily Strong, Retail Weak, Jones Lang LaSalle Reports

GlobeSt.com's Ryan Clark reported that poor Q1 reports and economic woes have dotted the landscape of a struggling economy in 2008. A stand out among other sectors, the multifamily sector perseveres in the minds and opinions of real estate professionals, while retail stumbles. Clark reported, the Chicago-based financial and professional services firm, Jones Lang LaSalle, surveyed 80 nationwide property owners, development firms and professional services firm/consultants attending the Urban Land Institute's Spring Council Forum in Dallas. There were positive and negative predictions in all sectors, but the multifamily was where most of the confidence lay, and retail had the least, Clark said.

The multifamily sector lead the "best optional" sector with 52 percent of respondents who predicted movement from zero to 30 percent over the last year. An optimistic 16 percent of respondents think multifamily investments will "outperform the previous year at 75 percent or more." Those that felt multifamily investments will fall zero to 10 percent totaled 22 percent, while no one thought it would fall by 20 percent or higher.

Retail received the most negative reviews with 44 percent of those surveyed who said it will underperform in 2008 from zero to 20 percent. Another 16 percent said retail would underperform by 20 percent or more. Although a few optimistic respondents (12 percent) said retail will secure a performance premium of 75 percent or more than last year.

According to Clark, survey respondents gave a moderate review for industrial with 13 percent saying it will outperform 2007 by 75 percent or more and 15 percent saying it will underperform by 10 percent or more. While the majority of respondents, at 33 percent, predicted a zero to 10 performance underperformance for industrial. The office sector recieved a mixed review with 42 percent of respondents predicting that it will underperform from zero to 20 percent; and 30 percent who said it would bring "a performance premium of zero to 30 percent". Related to 2007, 14 percent said they think office "will outperform at 50 percent or more".

"This survey indicates what many in the industry have been feeling--the market is holding steady," Minter said.