The Urban Land Institute released a report on nationwide real estate trends last Friday that forecasts a good 2005 for hotel owners and a tough one for office landlords.

The report predicts that property values for hotels across the nation should increase next year at a high rate, as more leisure and business travelers take trips. Office values, meanwhile, are expected to stagnate or decline. However, while the local office market remains soft, the local market for industrial space is improving.

The report predicts that the demand to invest in commercial real estate in 2005 remains high. Director of Real Estate Business-Advisor Services at PricewaterhouseCoopers LLP., Peter Korpacz says, "There's a tremendous amount of capital right now that's chasing real estate. Unless we see some strength in the stock market or a rise in interest rates, private capital should continue to be interested".

Attraction towards real estate investment stems from low interest rates and few other high-performing investment options. Interest also has been fueled by hopes for a real estate recovery. If job and wage growth increases and remains stable, then this could further bolster the real estate industry.

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