Wrapping the Week: Bullish Investors

The National Real Estate Investor/Marcus & Millichap Investor Sentiment Index declined in its fourth quarter survey, but the news is still positive.

The NREI site reports that the drop, to 176 from 180, is nominal. Don't fear, that's "a testament to the faith investors have in the sector given the tumult that has taken place in recent months."  The report sites the stability in confidence levels despite interest rate hikes earlier this year, and the federal government shutdown.

Plus, the previous 180 reading, from the second quarter, is a record high.

“Commercial real estate is getting more attention and more capital, because it stands out as a competitive investment alternative with competitive yields going into a recovery cycle,” noted Hessam Nadji, chief strategy officer and director of specialty groups at survey co-sponsor Marcus & Millichap Real Estate Investment Services in Calabasas, Calif.

He added in the release that "[d]espite all of the buzz around the stock market lately, investors still see a better value in commercial real estate." The study reports that 72% either "somewhat or strongly agree that commercial real estate offers favorable returns compared to other investment classes."

NREI and Marcus & Millichap say that they emailed online survey participation invitations in September and October, targeting public and private real estate investors and developers. The recipients were Marcus & Millichap clients, as well as subscribers to NREI, a NYC-based real estate information website. The NREI subscribers were selected commercial real estate investor, pension fund, and developer business subscribers who provided their email addresses. There were 532 valid responses, the report states.

The majority of the survey respondents, according to the report, are private investors (38%), private partnerships (15%), and developers (13%) with an average of $35.1 million invested in commercial real estate. REITs and institutional investors represent 6% of all respondents.

You can download the full report here.


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