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What do Big Investors Think of CRE?
The top 50 investors in global commercial property collectively added $31.1 billion to their portfolios in 2017, according to research by Real Capital Analytics (RCA). Investors acquired more income-producing commercial property, taking in $145.7 billion, yet they also sold investments priced at $114.5 billion.
RCA’s Jim Costello notes these top 50 investors posted a declining pace of acquisitions in 2016 and 2017. Their activity broadly mirrors that of the global market, with falling deal volume in the same periods. Still, the headline figure does not exhibit their true interest in the sector.
While the pace of acquisitions by these top 50 investors fell 2% year-over-year in 2017, the pace of dispositions fell 14% year-over-year. In total, this group of investors continues to find opportunities in income-producing CRE, says Costello. On a net basis, these investors increased their exposure to commercial real estate at a faster pace in 2017 than they did in 2016.
Looking at the investment activity of these top 50 investors by property sector, the appetite for investment on a net basis was strongest for the apartment sector, adding $18.3 billion in 2017.
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