The 2017 Real Confidence Executive Index was recently released which shows that there is a positive outlook among US commercial real estate investors, especially in the areas of industrial, infrastructure, and multi-family assets.
This index is based on how top executives from sixty-five commercial real estate investment companies would each allocate $1 billion of investments. It is a collaborative analysis done by the Altus Group, the National Association of Real Estate Investment Trusts (NAREIT) and the National Council of Real Estate Investment Fiduciaries (NCREIF) .
With the new presidential administration, it appears that the commercial real estate market is expecting tax cuts to occur and funds to be infused into the industrial sector. This sector took the top spot on the survey. However, it is not clear exactly what industrial properties will be most desirable. Potential changes in the trade policy could have a big impact on the kind of industrial assets and the best location for those investments.
Multi-family real estate dropped from being the top investment choice last year to second place this year… still a robust sector for investors. Additionally, there is anticipation that public works projects will be prominent with the new administration. So, the infrastructure sector is looking very strong. The allocations to this sector grew 216% from 2016.
Why this index matters? “Experience is key when investing in commercial real estate,” points out Peter Steil the CEO of NCREIF, “so observing how these seasoned executives allocate capital in this survey provides great insight on the market.”