Despite weak commercial property values, real estate will be a solid investment in 2004, particularly for those seeking a higher- yielding alternative to fixed-income investments, a local expert said today.
"Compared with other fixed-income investments, real estate will be the asset of choice," said Stan Ross, chairman of the board of the USC Lusk Center for Real Estatecolor>.
"At 6-8 percent currently, real estate yields are the lowest in a decade, but they offer a premium over other fixed-income investments," Ross said.
He said "many real estate investors will accept low yields at present because they think yields will improve as the economy continues to recover and property markets begin to revive."
Ross said the key for investors is to to closely track demographic and population trends to anticipate future investment and development opportunities.
One example, he said, is in developing homes, apartments, retail centers and offices for the nation's growing Hispanic and immigrant populations.
He said opportunities also will be found in the public sector as cash- strapped federal, state and local governments try to form more joint ventures and alliances with developers and investors to develop or redevelop public facilities or sell assets.
"Long-term, real estate will continue to be a strong investment alternative for institutions, high net-worth individuals and other investors," Ross said.