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Newmark Knight Frank Issues Global Markets Report

U.S. Appears Less Badly Off Than Some Had Feared; Reports From Europe, Asia, Middle East Are Mixed

New York, NY (04/26/2010)

The global real estate situation is far from perfect, but it appears to be on the mend, according to 2010 Global Real Estate Markets Annual Review And Outlook, an overview of the major commercial real estate markets worldwide, just published by Newmark Knight Frank. The report notes that at the start of 2009, nearly every office market in the world was in the midst of a period of weak occupier demand, plunging rents, and rising vacancies, with many observers foreseeing a prolonged depression. As the year progressed, however, some markets showed early signs of recovery, while others continued to suffer.          

Recovery in occupier and investment activity can be anticipated during 2010, the report states, but different markets show different prospects, with some previously prosperous areas showing vulnerability. In the U.S., the implementation of various Federal initiatives held the larger banks afloat and returned some stability to the market. The balance between inflation and deflation moved forward precariously as the expansion of the money supply was offset by lower overall demand and increasing unemployment. Despite bank lending declines of magnitude last experienced in the 1940s, and virtually no CMBS issuance, the real estate market has raised liquidity through REITs, private equity and closed-end funds at a blistering rate. A significant portion of assets remain impaired on a loan-to-value basis, continuing to create a large spread from bid-to-ask. Ultimately, the report concludes, these market conditions present the landscape for unique investment and leasing opportunities and a new frontier for the market in 2010.

The European economy began 2009 in very bad shape, with the Eurozone contracting by 2.4% in the first quarter of the year. Since then, Europe has been on a gradual but faltering path to recovery. Germany and France both began to grow in Q2, while countries including Italy, Belgium and the Netherlands followed suit in Q3. Others have lagged behind. The United Kingdom only came out of recession in Q4, while Spain continued to contract. Overall, the Eurozone is estimated to have contracted by 4.1% in 2009, while the U.K.'s gross domestic product (GDP) fell by 4.9%.

The economies of most Asia-Pacific countries came back pretty well in the second half of 2009. The International Monetary Fund estimates that Asia-Pacific's GDP grew by 2.5% in 2009, though there were considerable variations within the region. China and India have continued to be the main sources of growth, both seeing a relatively mild slowing.

Dubai is currently the most eventful market in the Middle East. The opening of its Burj Khalifa skyscraper in January marked the culmination of a decade of intense development in that region, but much of this development has been founded on troubling levels of debt.

The complete report is available on the firm's website at www.newmarkkf.com.

 About Newmark Knight Frank

Newmark Knight Frank is one of the largest independent real estate service firms in the world. Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 200 offices in established and emerging property markets on six continents. Last year, transactions were valued at more than $32 billion with annual revenues of over $811 million. With a combined staff of more than 6,300, this major force in real estate is meeting the local and global needs of owners, tenants, investors and developers worldwide. For further information, visit www.newmarkkf.com.

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