Commercial real estate has long been an attractive asset class for global institutional investors because of its potential to deliver superior risk-adjusted returns, serve as an inflation hedge and offer capital market options. While investors continue to increase allocations to commercial real estate this year, we have identified certain megatrends that yield nontraditional metrics for targeting growth opportunities and potential landmines long into the future. In particular, we focused on three main areas — globalization, demographic change and technology — to reveal the opportunities and risks they may present for commercial real estate investors.

Globalization: larger capital pools and a more connected world

Globalization — specifically global capital inflows — indicates a highly connected investment ecosystem exists across all markets and asset types. While growth in the trade of goods has stalled since 2008, global real estate investment