T H E L AT E S T: C O M M E R C I A L R E A L E S TAT E B O O M

C R E A T E D B Y F R A N K J E R M U S E K

• Commercial real-estate has taken another leap recently, with prices reaching records highs the market hasn’t seen since 2009.

• This recent boom in activity is being attributed to a great many things.

• Some feel that low-interest rates and a massive injection of capital explains the surge in business, while others feel that an uptick in foreign market activity is the reason for this shift.

• In cities around the world, valuations of prime real-estate are hitting record highs.

• With overall dealings increasing 36% from prior years, the commercial real-estate market has already reached $225.1 billion in annual transactions.

• This level of activity has many concerned, as its kind hasn’t been experienced since shortly before the crash in 2000

• Foreign markets are lighting up, too. China’s Anbang Insurance Group recently acquired New York’s Waldorf-Astoria for $1.95 billion, and rival Chinese insurer, Sunshine Insurance Group, purchased the Baccarat Hotel for $230 million.

• European buyers recently joined the real-estate mania, with U.K. firm M&G Real Estate acquiring a vacant office building for €90 million.

• A massive turnaround from the days of the crash, investors are using more of their capital in real-estate than from the past few years, combined. U.S. pension funds that suffered greatly during the crash are investing more in the market.

• Analysts have noted that an average investiture of 6.3% in 2011, has grown to 7.7% of assets invested in commercial properties.

• Whatever the case may be, this unexpected rise in market activity has many jumping with joy.

• With the valuation index reaching record heights, blowing past the 2013 high and setting a record at 118 last week, analysts are torn between ecstatic hopefulness and concern or the potential threat of an interest rate hike.

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