Commercial Realty Market Healing: Realty Pro
An uptick in trophy property sales are among a number of signs indicating a rebound in the commercial real estate market, Tom Fink, sr. vice president at Trepp, and independent provider of CMBS and commercial real estate information, told CNBC on Wednesday.
"The data is telling us that the markets are starting to come back," he said. "We see transactions taking place in the markets, particularly in Washington, particularly in New York."
"Overall I think the markets are starting to heal — that doesn't mean we won't have surprises into 2011," he added.
Trophy properties are drawing international money from across the globe.
"Foreign money has always looked at New York as a place you have to be," he said. "Whether it's the Singapore sovereign wealth fund or the Middle East sovereign wealth funds, they've always been active in buying and selling real estate in this country."
Even pension funds are being more active in buying real estate, he went on to say.
This comes as the resolution of troubled loans is lowering delinquency rates. CMBS delinquencies may crack 10 percent during the year, said Fink.
"Over the next three to five years, you're going to have somewhere between a trillion to a trillion and a half of commercial mortgages that are going to have to be refinanced," he said. "Some of that is on insurance company balance sheets; some of that is in CMBS; and some of it is in the banks."
"The market will find a way to fund that," he added.