U.S. Real Estate Cautiously Showing Early Revival Signs

Carolyn Cummins writes that while investing in U.S. real estate will not be for the faint-hearted in coming months, there is a sign of some life in the future, according to property brokers.

In its latest report, Citi’s US property analysts say they believe that the odds of being in a better economic place 12 months from now are higher. While probably not the time to dive in head first, it just might be the time to begin seeking opportunities within the sector.

The apartments sector has been given a cleaner bill of health by ratings agencies…

This cautious optimism was supported by the ratings agency Moody’s. Its latest report on the sector says that while the fundamentals of the apartment industry have continued to erode, trusts in the sector have taken appropriate steps to shore up liquidity and most continue to have stable outlooks.

“Multi-family real estate investment trusts have increasingly adopted defensive postures with their balance sheets and operating activities, seeking to maximise liquidity via a number of initiatives, including the use of Fannie Mae and Freddie Mac debt, ratcheting down development activities, and asset sales,” says Moody’s vice-president, Chris Wimmer. “As management teams appropriately focus on the challenging conditions, most balance sheets are well prepared for the next 12 to 18 months.” [via Business Day]

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