US real estate insights, September 2011

September 2011
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US real estate insights, September 2011

At a glance

PwC shares the results of the second quarter real estate investor survey; how volatility in global capital markets has tempered optimism in the real estate capital market; how recent accounting changes could affect property owners' financial reporting and business models; and an update on tax reporting requirements for foreign investors.

This issue includes several articles prepared by members of our Real Estate practice:

  • In "Investors mainly upbeat despite economic unease," Susan Smith, the editor of PwC's quarterly Real Estate Investor Survey, looks at the results of the second quarter 2011 survey and finds investors aggressively pursuing deals as they continue to see signs that the industry's overall fundamentals are stabilizing and even improving in certain sectors and regions.

  • In "Real estate capital markets ? the winding road to recovery," Martin Schreiber and Jay Weinberg address the current real estate capital markets environment and find that recent volatility in the global financial markets has tempered the optimism reflected in the industry's performance during 2010 and the first half of 2011. Lingering concerns from the recent financial crisis, developments in the CMBS market, and newly evolved macroeconomic issues have many investors cautious about next steps at the crossroads of the real estate recovery.

  • In "Leases: Moving in a different direction," Chris Gormsen details proposed changes to accounting rules that are expected to result from joint FASB-IASB deliberations. The changes potentially could affect not only property owners' financial reporting but also their business models as tenants change their behavior in response to the new guidance.

  • With foreign investors providing a significant portion of financing, managers of US real estate investment funds need to understand and comply with the applicable withholding tax rules. Marina Levin and Kelly Nobis outline the relevant rules in "FIRPTA (Foreign Investment in Real Property Tax Act) withholding and coordination of withholding rules under Internal Revenue Code Sections 1445 & 1446."