USC: Lavish CRE Capital Flow to Slow

The lavish flow of investment capital into U.S. commercial real estate, which has spurred property values to record levels, is likely to slow this year, according to the Lusk Center for Real Estate at the University of Southern California."While foreign and U.S. investors are continuing to acquire properties, they are showing more discretion," said Lusk Center director Stuart Gabriel. "On the residential side, flipping of properties has come to a virtual halt as markets have cooled." Meanwhile, investors have played "the appreciation game" with commercial property, investing in the RE equivalent of growth stocks, Mr. Gabriel said. "Now, capital is beginning to retreat from properties that offer relatively low returns," he said, predicting that investors this year will look for "well-located properties that provide steady cash flows as well as capital preservation and competitive returns." The Lusk Center can be found online at http://www.usc.edu/lusk.