“Washington, D.C., and New York City solidify ratings as the leading U.S. real estate investment markets, followed by San Francisco, Boston, and Seattle. All these metropolitan areas fit the Emerging Trends profile of 24-hour gateways along global pathways, which will continue to attract a large proportion of high-paying, brainpower jobs. Despite somewhat improved outlooks for all surveyed cities, most markets struggle with cash-strapped state and local governments and the prospect of reduced services, including police and fire protection and sanitation. Apartments easily outrank all other property sectors: favorable demographics and the housing bust should increase renter demand, and some interviewees forecast rent spikes by 2012 in some infill markets where development activity has ground to a halt. Readily available financing from Fannie Mae and Freddie Mac bolsters buying activity. Core players also like warehouses and infill grocery-anchored retail, while full-service center-city hotels remain the top choice for opportunity investors. Suburban office gets in the cold shoulder in surveys.”
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