Multifamily is Most Attractive Property Type for Investment Ahead of Industrial
Atlanta, March 18, 2016
–The majority of real estate investors in the Americas intend
to increase their property acquisitions in 2016, with Los Angeles as the top
target market ahead of New York City and Dallas/Ft. Worth, and Atlanta coming
in at the No. 6 spot, according to the CBRE
Americas Investor Intentions Survey 2016.
The 2016 survey results reveal that
investment sentiment regarding commercial real estate purchasing activity
remains positive, even in a more uncertain economic and capital markets
environment. The survey reveals 65 percent of investors intend to be net buyers—up
from 60 percent in 2015—with the vast majority (81%) intending to maintain or
increase their purchasing activity in 2016.
Atlanta moved up to No. 6 in 2015
after having placed as No. 15 in 2014. Atlanta is also considered a favorite
non-gateway market for investors.
Among the five different investment
types—core, secondary, value-add, opportunistic and distressed—value-add
remains the preferred strategy (40%). The preference for value-add declined in
the 2016 survey, while the preference for core (second highest) rose,
indicating some reversion to a more conservative strategy. Similarly,
investors’ risk for secondary (non-core) assets edged down.
Multifamily (28%) is the most
attractive property type to investors in 2016, replacing the industrial sector,
which was last year’s favorite. Office (24%) and industrial (23%) came in
almost tied for second. Retail (17%) still lags behind the other sectors, but
this percentage reflects a slight strengthening in preference from 2015.
Weak domestic economic performance
(27%) is considered the number one threat to the property markets in the
Americas in 2016—approximately the same as in the 2015 survey. Weakness in the
global economy (25%), particularly as related to China, is perceived as the
second largest threat to Americas’ property markets in 2016.
“We expect investment in U.S. real
estate will increase in the year ahead, driven by the relative strength and
stability of the U.S. economy and good property fundamentals,” said Brian
McAuliffe, President, Institutional Properties, Capital Markets, CBRE.
“Multifamily, office and industrial
will continue to be the products of preference; however we anticipate more
capital will pivot in the year ahead towards retail than compared to 2015. Core
and top-tier value-add will be best positioned to maintain high pricing and low
yields, while second-tier assets and markets will feel some downward pricing
request a copy of CBRE’s Americas Investor Intentions Survey 2016 or to speak
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methodology and composition of respondents The
22-question “Americas Investor Intentions Survey 2016” was conducted among CBRE
clients between January 11th and February 3rd, 2016. The “Americas” survey is
part of the larger global survey for which more than 1200 responses were
received representing investors from across the globe.
500 survey respondents indicated that the Americas is the global region which
they are most responsible for investment in their current position. This report
covers the responses of these 491 investors.
Americas survey respondents represent a wide cross-section of real estate
companies and investor types. The largest category is fund or asset manager at
29% followed by private property companies at 18% of the total. Private equity
firms and REITs were also well represented by the survey.
survey respondents invest in a wide variety of investment modes. Most investors
use multiple types of investment vehicles (and chose multiple types in the
CBRE Group, Inc. CBRE
Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in
Los Angeles, is the world’s largest commercial real estate services and
investment firm (in terms of 2015 revenue). The Company has more than 70,000
employees (excluding affiliates), and serves real estate owners, investors and
occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE
offers strategic advice and execution for property sales and leasing; corporate
services; property, facilities and project management; mortgage banking;
appraisal and valuation; development services; investment management; and
research and consulting. Please visit our website at www.cbre.com.