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CBRE’s Spencer Levy Doesn’t Think Retail is Doomed
It’s true, retail has taken a beating in the eyes of many, but Spencer Levy, CBRE’s Head of Americas Research, offers a deeper look into retail, industrial and multifamily investment. Along with his own personal view, CBRE’s surveyed 300 investors in America who align with Levy’s overall market assessment, namely: 50% favor industrial, 20% prefer multifamily, and only 10% selected retail as their number one prospect.
Here’s Levy’s take on the aforementioned sectors:
- Industrial: Two major trends are driving the demand: e-commerce and local being the new global. The last mile is the driver behind e-commerce, but a lot of local businesses are beginning to compete with globalization and automation. This raises the demand for small industrial buildings to serve as local businesses, like microbreweries, for example. In the short term, there’s excess supply, but the sentiment is that absorption will catch up.
- Multifamily: This is the asset class if you’re in it for the long game. The population is preferential towards renting over buying, so the investment market is bullish.
- Retail: Levy believes that the negative implications of e-commerce have been overhyped when it comes to the retail sector. Public REITs, especially those with grocery-anchored tenants and in strong demographic locations, will not be shut out by e-commerce. Rather than focusing on the growth of online commerce, investors should focus on demographic analysis and find the real estate in good locations. Research from Real Capital Markets supports this theory.
For comments, questions or concerns, please contact Daniella Soloway
