According to the recently released America’s Investor Intentions Survey 2017, investor confidence in the commercial real estate market in California and the rest of the United States is slightly more positive than it was in 2016. This comes in spite of the expectation of an interest rate increase. Some attribute the positive sentiment to an increase in economic growth and the reduction of regulation.
The results of the survey indicate that 67 percent of commercial real estate investors plan to be net buyers, focusing on acquisitions instead of dispositions. In 2015, 60 percent of investors were net buyers, and the rate increased to 65 percent in 2016. An overwhelming majority of investors, 83 percent, plan to either maintain or increase their purchasing activities in 2017.
The survey results also show that commercial real estate investors do have some concerns about the market. The primary risk factor for 22 percent of the respondents was that a slow rate of economic growth could compromise occupier demand. Just over 20 percent of investors reported concern about increasing interest rates while 16 percent had apprehension about overpriced properties.
A little over half of the investors who were surveyed are mainly seeking yield through government bonds and other categories of assets. The trend of searching for yield is more prevalent among institutional investors. Nearly 40 percent of the respondents viewed the industrial sector as the most appealing asset class for investments in 2017. While 28 percent preferred multifamily assets, office real estate was favored by 18 percent of investors.
Investors of commercial real estate, such as office buildings, shopping malls, industrial properties or warehouses, may require the assistance of an attorney who practices real estate law. The lawyer could provide legal counsel regarding foreclosures or litigate to resolve transaction disputes.