Oil drop may lead to US real estate slowdown
Demand for office space likely to decline in energy-driven markets such as Houston
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THE drop in oil prices to five-year lows, while helping consumers, is sparking concern that leasing and construction demand will be hurt in some of North America's best-performing markets for commercial real estate.
Energy-driven markets such as Houston, Calgary and Williston, North Dakota, which have benefited from a surge in property values, may be poised for a slowdown after the 45 per cent plunge in oil prices since June. Shares of real estate investment trusts with heavy concentrations of property in energy-related areas, such as office landlord Cousins Properties Inc and apartment owner Camden Property Trust, are underperforming.
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