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Real Estate Continues to Serve as Market Volatility “Shock Absorber”
Real estate continued to perform as a “shock absorber” against market volatility that picked up in both the fixed income and equity markets, according to LaSalle Investment Management. The U.S. and Canadian real estate markets continue to see the Goldilocks theme holding up, as the odds of a financial crisis or a major global recession remain very low for the rest of year, noted the Chicago-based investment firm in its Mid-Year Investment Strategy Annual 2018 update.
LaSalle’s Jacques Gordon, Global Head of Research and Strategy, says, “Thus far, 2018 has shown adaptability to the structural, secular and cyclical changes that have rolled through the commercial real estate market. Our mid-year update indicates that core real estate continues to perform at an appropriate level, relative to other asset classes, and that the inclusion of real estate raises portfolio returns, for a given level of risk.”
Gordon also notes, with looming trade wars, geo-political tensions, and differential exposure to rising rates, this pattern of highly-correlated global growth could be coming to an end. “Our mid-year update indicates that the last six months have raised the probability of country-specific differentiation, as both positive and negative trends unfold in the final six months of the year,” he says.
Looking ahead, LaSalle predicts the probability for a continued global expansion remains high for 2019.
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