Typically citing the continued growth of the U.S. economy, an overwhelming 78 percent of real estate executives polled in a national industry survey said they were “bullish” on the 12-month outlook for the U.S. commercial real estate market. For the third year in a row, executives also named multifamily as the most attractive opportunity for real estate investors in the coming year, according to the DLA Piper 2007 “State of the Market” real estate survey, results of which were released May 1 in conjunction with the New York-based law firm's seventh annual Global Real Estate Summit in Chicago.

“The results were not too surprising, given the incredible activity in the market,” says Jay Epstien, chair of DLA Piper's U.S. real estate practice. We anticipated more caution in the response. People worried about us being at the top of the curve and coming back the other side. “There is an abundant supply of capital and liquidity out there looking for a home.”

Of the 274 real estate executives who participated in the survey, 26 percent cited multifamily as the top investment market over the next year, followed closely by downtown office space at 23 percent. Suburban office real estate was viewed as the weakest industry sector, with only 9 percent of respondents pegging the sector as favorable.

Other highlights of the survey: A 72 percent majority of survey takers said they expect cap rates to stay put at current historic lows—and 10 percent predict cap rates will go down over the next six to 12 months.