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United States

Report | U.S. Investment Outlook - H1 2017

Summary

​The appetite for real estate debt and equity remains high from both domestic and offshore sources of capital, keeping capital markets activities strong at mid-year. Despite record stock market highs and signs of stability in the markets, uncertainty on the future of U.S. policy and the Federal Reserve remains, impacting investment across sectors. This, along with current asset pricing, is pushing investors beyond markets or sectors to specific niche sectors, users and micromarkets.

This targeted focus comes as markets are more competitive, barriers to entry are elevated and underwriting is increasingly conservative. So despite stable market fundamentals and liquidity across a diverse group of investors, several factors are limiting the placement of capital:​

  • Nearly $2.0 trillion of commercial transactions since 2012 is limiting opportunities;

  • With the exceptions of the industrial and net lease sectors, large transactions over $250 million are down 27.7 percent year-over-year;

  • Those with strong, stable portfolios are opting for longer hold periods, recaps or refinancings given concerns of redeploying capital;

  • Domestic and offshore institutional capital remains conservative and selective; and 

  • Current pricing is proving a challenge for groups underwriting their exit, especially in emerging markets or submarkets.​

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