PwC: Cap Flows to RE Despite Weakening Market

Capital flowed into real estate "at a brisk pace" in the first quarter despite the fact that fundamentals weakened in all sectors of the market, according to a quarterly investor survey by PricewaterhouseCoopers.Apartment and industrial assets have suffered as capital has shifted into the retail and office sectors, the PricewaterhouseCoopers Korpacz Real Estate Investor Survey found. "With few alternative hedges against risk in the broader economy, investors are still willing to pay a premium for the relative safety of quality real estate," said Peter Korpacz, director of the Global Strategic Real Estate Research Practice at PricewaterhouseCoopers. "However, if occupancy rates and rents remain sluggish or continue to worsen, and interest rates rise, prices could drop precipitously." The survey also found that capital is flowing into fewer regional markets, especially the Midwest and the West Coast. PwC can be found on the Web at http://www.pwcglobal.com.