S
an Francisco office buildings are selling at a fraction of their previous value, a sign that the real estate market may be on the verge of a rebound. This could not have come at a better time, as concerns about federal public works and trade wars dominate headlines.

    Despite these worries, there are signs of optimism in the industry. CBRE reported a 14% increase in first-quarter real estate investment volume compared to last year, with private and institutional investors leading the way. Banks accounted for 31% of loan closings, while commercial mortgage-backed security investors and life insurers were also active.

    Tourist-friendly cities like San Antonio are seeing new hotel projects and renovations, while Denver is experiencing a surge in apartment construction. Meanwhile, Class B shopping malls are being repurposed into mixed-use developments across the US, according to Matthews Real Estate Investment Services.

    However, environmental permit delays and construction labor shortages remain concerns. The biggest obstacle to getting projects underway remains finance, with construction loan rates ranging from 6% to 13.8%. Despite this, life insurers are playing a key role in making apartment projects a reality, offering non-recourse programs tied to asset value with little to no performance terms.

    In the current volatile rate climate, locking in rates can be invaluable, says Mark Reichter of Gantry. "If a rate works now, lock it, move forward," he advises. Recent deals, such as Vista Property Group's $173 million financing for a 31-story apartment tower in Chicago, suggest that more projects like this will contribute to the national turnaround.

    While caution is always warranted when proclaiming a market rebound, these signs of optimism are worth noting. As one developer recently ended an 18-month drought of major downtown project starts, it's clear that every local real estate market has its own logic – and more projects like this will be necessary for a national turnaround.