David Olney, CEO, Berkshire Residential Investments

The senior housing sector has recently experienced downward pressure on occupancy and disappointing returns due to oversupply caused by recent development activity. However, the sector is approaching an important inflection point, where it will soon witness the dramatic impact of the baby boomer population as it shifts deeper into retirement age. As it has in every stage of life that this population has progressed through, the baby boomers will collectively be a disruptor to the norms currently associated with senior housing. This population will redefine many aspects of senior housing, potentially demanding changes to architecture, operations and the delivery of services. The challenge for investors in this space will be how to select investments that will best accommodate the new lifestyle demands of this population.

Meghann Martindale, global head of retail research, CBRE

Gen Z is coming of age and disrupting retail. They may be young, but they are valuable with tremendous buying power, and they prefer to shop in stores. These digital natives influence brands, households and communities. They are armed with an instant filter using social media as a buying channel and driving the rise in mobile commerce. Retailers can’t waste time in capturing their attention and will benefit greatly from keeping them engaged and inspired.

Brad Watt, president and managing partner, Petra Capital Advisors

2020 will be the year of alternative investing. Alternative investments are the fastest growing asset class in diversified portfolio strategies and are expected to grow by 60 percent in the next four years, reaching $14 trillion in assets by 2023. Real estate equity and related debt strategies will realize the largest share of this allocation as investment vehicles evolve and become more accessible to retail investors. An aging population and widening longevity gap will continue to drive investment themes. Liability driven income (LDI) will be the new plumb line for investors as investment objectives shift from growth to income. Real estate investment trends should generally favor demographically driven real estate sectors such as multifamily and single-family rental housing, healthcare and medical office assets, self-storage, student housing and, senior housing.

Blake Wettengel, CEO, NB Private Capital
We see 2020 as being a strong year ahead for commercial real estate, especially in the alternative asset class of student housing, which has grown to a 12.5 percent share in 2019 from 6 percent in 2007. This has been a “sleeper” type of investment that many investors and larger institutions are now getting on board with because they know that it’s proven to be historically recession proof no matter what the state of the economy. With an election year coming up, uncertainty about trade wars …. real estate is a brick-and-mortar entity that will always stand the test of time.

Tommy Lee, head of capital markets, Trammell Crow Co.

Expect steady investment in ground-up development through 2020 as investors continue to balance their search for yield and increased tenant demand for new, more functional space across all product types. As the extended cycle continues into an election year, capital will be heavily focused on downside risk and invest under a “flight to quality” thesis that will be increasingly selective around deal quality, location and sponsorship. From a product-type perspective, expect a slight decrease in industrial investment due to rising costs and an increased appetite for office and life-science product.

Igor Perepelychnyi, CEO, Setcoin Group
2020 is going to be a year of turning points of cyclical change. We are in late cycle in what appears to be a slowing growth environment. Returns in equities, credit and alternative assets are available, but the days of simply insulating exposure of risky assets with an allocation to bonds are over. Over the next decade, alternatives such as private equity and real assets could help juice returns. The main focus of this transition for investors could be increased allocations to commercial real estate, renewable energy, infrastructure, infra-tech and private equity. There will also be a growing public focus on global issues — such as reaching the United Nations 2030 carbon emission goals, reducing hunger, poverty, etc. — influencing more investors to emphasize ESG, sustainable development and impact investments in their portfolios.

Simon Wallace, global co-head of research and strategy, alternatives, DWS

2020 could turn out to be a better than expected year for real estate. Economic conditions are showing signs of improvement, occupier markets remain exceptionally tight, while further central bank easing has opened the door for yield compression. Paris and Warsaw stand out as two markets we expect to outperform in 2020, while activity in London could well step up a gear if clarity over Brexit can be found. Residential and logistics remain our favored sectors, although with prices rising sharply across both, a selective approach is increasingly important.

Doug Poutasse, managing director, head of research and strategy, BentallGreenOak

As we look ahead into 2020 and the third decade of the millennium, expect real estate to remain popular with investors desperately seeking yield in the ongoing zero-rate environment. Investors can find value by continuing to follow talent to the places where young professionals want to live and work — not just to the major innovation hubs but to thriving secondary markets. While rising land and development costs will constrain new supply, we’ll be continuously watching the consumer for any signs of a pullback. Additionally, sustainability will increasingly be a key value-add differentiator for investors seeking resilience.

Nicholas Ilagan, senior vice president, asset management, CapRock Partners

2020 will be another strong year for the industrial sector, driven by the continued growth of e-commerce and a supply-constrained industrial and logistics market. External macroeconomic factors such as trade wars affected leasing activity for mid-sized buildings around 150,000 square feet during 2019; however, expect leasing activity to kick back up in the first half of 2020. Demand for new state-of-the-art industrial warehouses over 1 million square feet is at an all-time high, and we anticipate it continuing throughout the new year.

Brian Cornell, senior director, JCR Capital

On the positive side, it’s hard to imagine cap rates increasing materially in 2020 given increased allocations to U.S. real estate and continued downward pressure on interest rates. Driving NOI growth and managing capex budgets will be challenging, however, particularly in primary markets with high taxes and regulatory challenges. Secondary markets offering strong employment growth and affordability are likely to provide a more favorable risk/ return dynamic in this environment. Another likely trend in 2020 will be further growth and increased capital flows into the alternative asset classes (self-storage, student housing and senior housing) as investors search for yield.

Julia Bard, chief operations officer, Capital Square

2020 is expected to be another superior year for multifamily. The asset class is projected to continue above-average rent gains and to remain one of the most desirable asset classes. The average national occupancy rate has remained above 95 percent for several years and current demographic trends favor rental housing, unlike prior generations who preferred to own homes. Medical real estate will remain favorable due to concerns about the U.S. economy entering a recession. In good and bad economic times, people need medical care and necessity-based medical real estate is not correlated to the general economy, deeming it recession resistant.