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Higher Investor Activity Anticipated Despite Headwinds
The Russia-Ukraine war, labor shortages, supply chain disruptions and inflation continue to drive headlines and commercial real estate investment intent. But despite these and other headwinds, more than half of industry professionals (52.3%) said they anticipate that investment activity will be “somewhat or significantly higher than results achieved in 2021,” according to the 2022 Q1 LightBox RCM Investor Sentiment Report.
While investment activity is anticipated to continue upward momentum, 35.4% of those queried indicated that they believe sales prices will be “somewhat or significantly higher” in 2022 versus 2021. And 72% of respondents anticipate commercial property sales volume to exceed those reported in 2021. Industrial and multifamily were the top product choices among investors.
In response to the somewhat mixed-bag results, LightBox’s Senior Vice President, Broker Operations Tina Lichens noted that “Investors are navigating a complex environment with significant opportunities as well as economic headwinds that are dictating a more nuanced approach. We expect to see subtle shifts in investment approaches and strategies as a result.”
When asked to rank the most significant factors that could negatively impact commercial real estate throughout the remainder of 2022, respondents listed inflation as a top concern, along with increasing interest rates and construction costs.
Yet for the upcoming challenges, investors continue to appear bullish when it comes to commercial real estate, due to increased population growth and household formation. Investors especially focused on growth in Florida and Texas metros, as well as Atlanta, Charlotte, Las Vegas, Nashville, Phoenix, Raleigh-Durham and Salt Lake City.
“There is no question that there are headwinds that may influence commercial real estate investments over the next 12 to 24 months,” said Steve Shanahan, LightBox’s General Manager, Broker Operations. “Today’s investors possess a level of sophistication and creativity that will continue to drive investment gains and elevate new sectors and opportunities in 2022, 2023 and beyond.”
- ◦Sale/Acquisition
- ◦Economy
