CCIM Feature

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Market Monitor

Economists are mostly prophets of doom these days, but Mark Dotzour, chief economist and director of research for the Real Estate Center at Texas A&M University, has some good news to share.

"Underlying investor demand for real estate is very strong," he says. "REITs have raised a lot of money and need to invest it. Private equity funds have raised cash and haven't found enough deals either. They are faced with the prospect of buying property or giving the investors their money back. Cap rates for trophy properties and agricultural land values are quickly approaching the bubble levels of 2007."

He also has some good advice for Washington. "The best thing that could happen to the economy would be for Congress and the president to adopt Simpson-Bowles (proposed deficit-reduction legislation) and begin a credible program of balancing the budget over a 10-year period."

As for commercial real estate's recovery this year, he's keeping his eye on small businesses. "I'll be watching monthly surveys from the National Federation of Independent Businesses," Dotzour says. "Until small businesses get more optimistic about the future, hiring will not happen."

For more from Mark Dotzour, attend CCIM Live! Oct. 12 – 16 in Las Vegas, where he'll provide a keynote presentation on commercial real estate and the economy.