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Apartments Represent Larger Share of Global CRE Investments
New research by Real Capital Analytics (RCA) shows the apartment sector now constitutes a quarter of all investment in income-producing commercial properties globally. Apartments represented 34% of total investment activity for the Americas overall in Q3 2019, reports RCA.
RCA’s Jim Costello writes, “In the past, investments in apartment properties have been a small part of the institutional investment world outside of the U.S. market. The economics of residential construction have traditionally made it more attractive for developers to build to sell rather than building to rent. In the U.S. though, tax regimes and development planning have provided developers and investors with wider flexibility on how to approach the market.”
With the flexibility on offer in the U.S., investors have pushed the apartment sector up to represent the largest portion of the U.S. investment market. But, Costello notes, the real story is expansion in Europe has pushed apartments up to represent one-quarter of the global commercial property investment market.
In the EMEA region, apartment deal activity represented 21% of all investments in income-producing properties in Q3 2019. The growth in market share for EMEA is somewhat concentrated. Large investment markets like Germany, the Netherlands, Spain and the U.K. each have seen at least $5 billion of apartment deal activity for the first nine months of 2019, reports RCA.
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