NEW YORK - New York-based Sonnenblick-Goldman Co. predicts that real estate markets will remain strong and expand in 2000. "We will see commercial real estate become a more globalized industry," says president John Bralower. Some of his predictions for the coming year include American investors targeting Asia; an increased lack of liquidity in Latin American markets; and European investors continuing to target high-end U.S. properties, particularly in the hotel industry. He also noted that Eastern Europe will not have the foreign appeal many predicted.

Some other trends Bralower expects: a widening rift between primary and secondary markets, with secondary markets continuing to be adversely affected by the lack of high growth industries and the move towards e-commerce and a 24-7 global economy; major urban areas remaining healthy; strong investment demand and limited availability of real estate assets, though REITs and opportunity funds will probably begin selling more properties; and e-commerce's growing impact on the retail sector.

Some other predictions for the coming year include:

Office. Steve Kohn, managing director of Sonnenblick-Goldman's Capital Markets Group, forecasts that U.S. office markets should remain strong in 2000, "although there is some credit risk with Internet companies leasing space in markets such as Boston, San Francisco and New York." With limited new supply and strong job growth, he adds, many of the country's office markets should stabilize at single-digit vacancy rates for Class-A space, with Class-B and Class-C space in the low to mid-teens.

Retail. "Sales in retail centers should continue to increase with the economy in 2000," says Andrew Oliver, managing director of retail sales and financing. "But there will definitely be erosion from e-commerce, as people have less time to shop and are increasingly using the Internet to buy basic commodities." He goes on to say that bricks-and-mortar retailers will be investing heavily in expanding e-commerce business, which will capitalize on established brand recognition. Prime malls will continue to excel, neighborhood centers will continue to be strong and theater and entertainment development will continue in primary markets, such as New York City.

Hotels. Arthur Adler, managing director of the company's lodging and leisure group, says he expects industry fundamentals to remain constant in 2000. "Most of the industry is looking at RevPar increases of between three and four percent," he says. "Occupancies will be relatively flat, with average room rates increasing at or above the rate of inflation and profits will again increase for the seventh year in a row." Adler also notes that the industry should "continue to see private capital, pension-fund capital and public REITs joining with private-equity companies as the major investors in hotels in the United States."