CBRE reports in their annual Investors Intentions Survey 2018 that some investor habits are changing with regards to US commercial real estate. The popular survey is conducted by the Americas CBRE Research, and the 2018 results reflect the sentiment of nearly 300 investors.
Overall, investors remain bullish on the US. Here are some the 2018 headlines:
- The largest share of respondents will increase their purchases.
- A majority will not change their appetite for risk.
- Value-add remains the most popular investment strategy (the other are core, good secondary, opportunistic, and distressed), but it is down from 2017 sentiment.
- Secondary assets continue to increase in popularity driven by higher yields and diminishing core assets.
- Institutional investors remained committed to core assets.
- Industrial property remains the preferred property type followed by multi-family and office.
- Los Angeles/SoCal was the top-ranked investment market followed by Dallas/Ft. Worth and New York.
- Debt remains the top-ranked alternative.
- Risks this year include “global economic shock” that would affect occupier demand, and rising interest rates.
- Last-mile logistics, flexible work space, and diversification away from traditional office and retail will have the highest impact on commercial real estate.
- Many are concerned about the high amount of co-working space on office long-term capital values.
“Lead rather than follow the money in 2018 and take advantage of any short-term volatility or market dislocation to your long-term advantage.” Spencer Levy, Head of Research & Senior Economic Advisor, Americas CBRE Research. Americas Investor Intentions Survey 2018.
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