Contrast between Commercial and Residential Markets
The disparity between commercial and residential real estate markets was huge this past year. According to a recent report by Standard and Poor's rating services, REIT’s propelled with strong investor support lifted shares of the largest public REIT’s by 35% in 2006. In contrast, homebuilding stocks were down roughly 20% as challenging conditions continued to diminish investor interest last year.
Commercial real estate has not been effected by the residential downturn. Money will always follow strong commercial investment opportunities that bring good returns. Finding the good assets that are not overpriced is the primary challenge in today’s commercial markets.