March 25, 2021

As widespread vaccinations aid the economic recovery, CRE investors are showing increased appetite for risk and a preference for secondary markets. Those are key findings of CBRE’s 2021 Americas Investor Intention Survey.

WHO is looking to buy or sell?

Investment Activity to Bounce Back from COVID Lows, but a Disconnect Between Buyers and Sellers Remains

Although Americas investor sentiment is improving, there is a disconnect between buyers and sellers. Buyer optimism is fueled by a healthy U.S. economic recovery and the Fed’s “lower-for-longer” interest rate stance, which have helped to encourage record-high capital targeting North American real estate. On the other hand, sellers prefer to hold assets through uncertain times and wait for valuations to stabilize.

HOW much risk will investors tolerate?

Investors Willing to Move Out on the Risk Spectrum

Investors’ risk tolerance is growing as they aim for higher returns. Almost 30% of survey respondents are targeting opportunistic and distressed assets in 2021. This is the highest in the survey’s seven-year history and compares with 16% in 2020.

However, distressed deal sourcing may be a challenge due to strong stimulus and relief measures, which are aiding the economic rebound.

WHERE are investors looking to deploy capital?

Investors Favor Sun Belt Markets

Sun Belt markets garnered strong interest, particularly those with favorable job and population growth prospects and, in most cases, higher yields.

For the first time in survey’s seven-year history, large investors (those with assets under management of more than $50 billion) are more enthusiastic about secondary markets than primary markets.

WHAT sectors are most attractive to investors?

Industrial & Logistics and Multifamily Sectors Remain Primary Targets, but the Pandemic Era Could Create Opportunities for Other Asset Types

Pricing will be aggressive for industrial & logistics and multifamily assets. The survey suggests investors are looking for opportunity amid the challenges faced by the hospitality, retail and office sectors. A survey record 11% of investors are primarily seeking acquisitions of distressed hotel assets.

WHO is looking to buy or sell?

Investment Activity to Bounce Back from COVID Lows, but a Disconnect Between Buyers and Sellers Remains

Although Americas investor sentiment is improving, there is a disconnect between buyers and sellers. Buyer optimism is fueled by a healthy U.S. economic recovery and the Fed’s “lower-for-longer” interest rate stance, which have helped to encourage record-high capital targeting North American real estate. On the other hand, sellers prefer to hold assets through uncertain times and wait for valuations to stabilize.

HOW much risk will investors tolerate?

Investors Willing to Move Out on the Risk Spectrum

Investors’ risk tolerance is growing as they aim for higher returns. Almost 30% of survey respondents are targeting opportunistic and distressed assets in 2021. This is the highest in the survey’s seven-year history and compares with 16% in 2020.

However, distressed deal sourcing may be a challenge due to strong stimulus and relief measures, which are aiding the economic rebound.

WHERE are investors looking to deploy capital?

Investors Favor Sun Belt Markets

Sun Belt markets garnered strong interest, particularly those with favorable job and population growth prospects and, in most cases, higher yields.

For the first time in survey’s seven-year history, large investors (those with assets under management of more than $50 billion) are more enthusiastic about secondary markets than primary markets.

WHAT sectors are most attractive to investors?

Industrial & Logistics and Multifamily Sectors Remain Primary Targets, but the Pandemic Era Could Create Opportunities for Other Asset Types

Pricing will be aggressive for industrial & logistics and multifamily assets. The survey suggests investors are looking for opportunity amid the challenges faced by the hospitality, retail and office sectors. A survey record 11% of investors are primarily seeking acquisitions of distressed hotel assets.

Related Research

U.S. Real Estate Market Outlook 2021

November 11, 2020
Explore the 2021 U.S. Real Estate Market Outlook for insights on accelerating trends and recovery forecasts for the economy and various real estate sectors.
November 11, 2020

U.S. Inbound & Outbound Investment Trends H2 2020

March 8, 2021
COVID-19 Slows 2020 Inbound Capital to Seven-Year Low
March 8, 2021

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