GE "relatively optimistic" on U.S. real estate

By Scott Malone

NEW YORK (Reuters) - General Electric Co. (GE.N: Quote, Profile, Research, Stock Buzz) expects the U.S. commercial real estate market to remain relatively healthy over the next year to 18 months, a top GE executive said on Tuesday.

"We're relatively optimistic about the next 12 to 18 months from a U.S. basis," Joseph Parsons, president of North American equity, said at the Reuters Real Estate Summit. "There is still a tremendous amount of appetite for real estate assets, for real estate commercial lending assets."

Parsons said GE's real estate arm has not yet seen investors pulling capital out of the property market, even as rising energy prices have crimped consumer spending.

"We thought $70 (a gallon) oil prices were going to drive capital out of the market, we thought the U.S. consumer was going to have an impact, and it hasn't," Parsons said.

Still, he acknowledged that lenders have become more conservative in financing commercial real estate deals, which could slow price appreciation.

"There was a period when we didn't understand how some people could pay the prices," Parsons said. "You're seeing some moderation in that, I think you're seeing the market coming back a little bit to our valuation."

Alec Burger, senior vice president of North American lending at GE Real Estate, said that in the United States the company was most interested in increasing its presence in New York, Washington, Boston and Chicago, with Dallas and Houston also starting to look more appealing.

"We can afford at this point to be more focused on some of the bigger markets," Burger said.