WASHINGTON -- Industry executives and developers are saying the commercial real estate cycle may have reached its peak and a scale-back could come in 2007.

The finding comes from a survey from the Urban Land Institute, a planning and research group and PricewaterhouseCoopers. More than 600 developers, investors, brokers, consultants and lenders were surveyed this summer for the "Emerging Trends in Real Estate 2007" report.

Commercial real estate is starting to return to an income-producing investment versus an appreciating asset class, the survey found. Still, high construction expenses are one of the reasons that commercial real estate cash flow will continue to grow. The main difference between the commercial real estate market and the residential market has been supply and demand being linked to rents and vacancies, not rising interest rates that have led to a cooled housing market. Those surveyed said a pullback in 2007 will result in higher capitalization rates by as much as a 0.7 percentage point in certain property types.

Seattle was deemed the best market to invest in right now due to an expected rise in office rents and the prediction that it will be best potential of any American city to benefit from growth in Asia. Other cities listed as "global pathways" were New York, San Francisco, Los Angeles and Washington. Philadelphia and Chicago received low investment marks because of economic problems and their inability to compete with other cities like New York and Washington, the survey showed.