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Investor Sentiment Increases Slightly in Early 2022
Investor sentiment was up slightly in early 2022, according to Marcus & Millichap’s recently released “Investor Sentiment Study, H1 2022.” Based on data collected between February 16-24, 2022, the Investor Sentiment Index stood at 170, slightly above the 165 reported during the second half of 2021.
Most respondents still consider that commercial real estate offers favorable returns, relative to other investment classes, and that the majority of those surveyed are planning an increase in their CRE investments over the next 12 months.
Respondents also reported the following:
- Most respondents agreed that there is “an abundance of capital ready to invest”
- Responses were mixed regarding public REIT stock investment, with 5% strongly agreeing that it is a good time to invest in public REIT stocks, and and 27% somewhat agreeing
- One in five of those surveyed agreed that it would be better to invest in the stock market than in real estate
- When it came to market conditions, 49% disagreed that the worst of the economic downturn is behind us
- Respondents said they were more likely to consider buying seniors housing, followed by self-storage properties. They also said now is the time to sell office and retail properties.
- When it came to interest rates, 41% of those surveyed expected them to increase by at least 100 basis points over the next 12 months
- The higher the interest rates, the less likely they would be to buy
The top concerns among investors over the next 12 months are rising interest rates and increasing inflation, followed by operating expenses and tax changes.
- ◦Sale/Acquisition
- ◦Economy
