Commercial real estate debt is having a moment. New mortgage lending in 2017 is forecast to reach $515 billion, according to the Mortgage Bankers Association — more than the $502 billion originated in 2016 and topping the $508 billion record set in 2007. And real estate debt funds are raising significant amounts of capital from investors.
In the 21st century, investors embroiled in a different ODCE may find themselves in a similar place: The NCREIF Fund Index – Open-end Diversified Core Equity 2016 (gross of fees) return, at 8.77 percent, was the index’s lowest since 2009.
Massive Chinese investments in international real estate have become commonplace in the past four years, but new analysis shows the trend is for even larger deals. Rather than bucking this trend, Beijing’s capital controls may even enhance the move toward bigger investments.
Despite the perception of slowing demand in second half 2016, occupancy gains across major data center markets in the United States nearly reached the record highs established in 2015. In addition, the rapid enterprise adoption of network-dependent technologies is putting a heightened importance on connectivity and bolstering demand in primary markets.
Chilean pensioners join institutional investors worldwide, who have charged into the category, causing listed real assets to soar by 325 percent from 2009 to 2014, according to eVestment Alliance. That pace includes a doubling of investment in commodities; a quadrupling of investment in U.S. REITs; and surging growth in global listed infrastructure, master limited partnerships and multi-strategy real asset funds.
The Editorial Advisory Board of this publication will be meeting in San Diego, April 24–27. In preparation for the spring board meeting, let’s look at some highlights from the past year’s editorials that point to where we are headed in the future.
My list of pet hates isn’t just long, it seems to grow at a pretty healthy rate every day. I would be more than happy to trade off all that pique and rage, however, if I could lob in just one phrase instead. A phrase that is so deceptive and fraudulent, and as duplicitous as any to have emanated from Machiavelli on a dark night.
Los Angeles claimed the highest position in the 2017 National Multifamily Index by Marcus & Millichap.
Sales prices for suburban office properties are growing faster than prices for CBD office assets, according to the most recent Moody’s/RCA Commercial Property Price Indices, which are based on a repeat-sales methodology.
CBRE saw its secondary trading volume in real estate funds reach $2.43 billion in 2016 across its global network, with 187 transactions, a 20 percent increase in market activity for secondaries.
The global industrial and logistics real estate sector appears to have reached a mature state in the current economic cycle, according to CBRE.
GIC, Singapore’s sovereign wealth fund, has formed joint ventures with a group of investors, including affiliates of Beacon Capital Partners, to acquire more than 2.1 million square feet of office assets in the Washington, D.C., metro area totaling more than $1.05 billion in aggregate asset value.
Total global hotel real estate transactions in 2017 are expected to reach $60 billion, mirroring the level recorded in 2016, according to JLL.
Much uncertainty remains regarding how tax reform will proceed under the Trump administration, but the commercial real estate industry is closely watching.
Sovereign ratings in general continue to trend downward, with negative outlooks currently outnumbering positive outlooks by a four-to-one margin.
In another indication the current real estate market cycle may be near or at its peak, global annual fundraising volume for private equity real estate funds decreased in 2016 after six consecutive years of expansion.