Office REITs step up construction to record levels to cope with demand and rising real estate prices, says ACL Real Estate and Property Management.
With real estate prices soaring all across San Francisco, landlords are increasingly opting to build office buildings rather than buying them, says full service real estate and property management firm, ACL Real Estate and Property Management. The result is that the country is seeing the highest amount of development by REITs in 2014, as compared to the past decade.
Office real estate investment trusts (REITs), led by Kilroy Realty Corp, Vornado Realty Trust and Boston Properties Inc, intend to invest somewhere in the region of $11 billion in fresh projects, most of which will be focused on areas that see the most investor and tenant demand, such as San Francisco and New York. Currently, office real estate prices have soared beyond the previous peak levels, driven to a large extent by sovereign wealth funds that are willing to settle for lower yield in the search of safe investments. However, since REITs have shareholders to answer to, they need higher returns. Today, they feel that building is a better option than buying, given the competition from institutional buyers.
Read more: DigitalJournal.com via PRWEB.COM Newswire San Francisco to See Highest Level of Office Real Estate …