Location, location, location is the recurring mantra in the real estate industry. Market fundamentals across all sectors fluctuate depending on what city, state or region you are examining.

Looking at office markets, Cushman & Wakefield recently published a "barometer," which contains a forecast of a market’s relative performance compared to other markets through fourth quarter 2004. Central business districts (CBDs) with an above average outlook and positive momentum, include: Tampa; Fort Lauderdale; Orlando; Miami; Westchester County, N.Y.; Phoenix; Boston; and Fairfield County, Conn. Cities with a below average outlook and negative momentum include: New York City’s major submarkets, Portland, Denver, Philadelphia, Chicago, Dallas and Washington, D.C.

In addition, Reis Inc. looked at four real estate sectors (apartment, industrial, retail and office) and cities with the highest forecast revenue growth in each of those sectors. Ranking in the top of three sectors was Suburban Maryland, while Tucson, Long Island, San Bernardino/ Riverside, Norfolk/Hampton Roads, Orange County, San Diego, Baltimore, Sacramento and Birmingham ranked in two sectors.

On the downside, three cities, Boston, Richmond and Cincinnati ranked lowest in growth in three sectors while San Francisco, San Jose, Indianapolis, Wichita, Pittsburgh, Detroit, Columbus and Omaha ranked among the lowest in two sectors.

When Fitch Ratings published its Fitch Real Estate Cycle Report in October 2004, 20 of the 25 largest U.S. markets were classified as being in the recovery stage of the standard real estate cycle. Using rent, occupancy and growth information, Fitch identified a specific position in the real estate cycle for each sector in the top 25 U.S. population markets. Taking into account all the sectors, the three markets that were classified at the peak of the cycle were Southern California’s Inland Empire, Phoenix and Long Island. Those in the trough overall were Houston and Pittsburgh. Breakdowns of the real estate cycle status of each sector in the 25 markets are included in the chart below.

Top/Bottom 5 Real Estate Markets–Risk vs. Return
Apartment Market	Forecast Revenue Growth	Industrial Market	Forecast Revenue Growth	Office Market	Forecast Revenue Growth	Retail Market	Forecast Revenue Growth
San Bernadino/ Riverside	4.4%	Baltimore	2.7%	Charlotte	4.4%	Baltimore	2.7%
Tucsona	4.1%	San Bernadino/ Riverside	2.4%	Jacksonville	3.8%	Orange County	3.3%
Norfolk/Hampton Roads	3.7%	Tampa-St. Petersburg	2.3%	Nashville	3.7%	Tampa-St. Petersburg	2.3%
Philadelphia	3.7%	Miami	2.3%	Sacramento	3.4%	Miami	2.3%
Orange County	3.7%	New Orleans	2.1%	Birmingham	3.0%	New Orleans	2.1%
Wichita	-0.2%	San Francisco	-0.3%	Pittsburgh	-0.6%	Richmond	-1.8%
Cincinnati	-0.1%	Boston	0.0%	Detroit	-0.6%	Indianapolis	-1.6%
Indianapolis	0.0%	Columbus	0.1%	Cincinnati	-0.5%	Cincinnati	-0.6%
San Jose	0.2%	Detroit	0.1%	Chicago	-0.4%	Memphis	-0.5%
Boston	0.5%	Seattle	0.2%	Hartford	-0.2%	Milwaukee	-0.3%
Source: Reis, Inc.
Note: Forecast Revenue Growth is the expected change in rental revenue, less vacancy loss and concessions, from second quarter 2004 through year-end 2005.