Commercial real estate investment trends & outlook
Increase in activity across primary markets and entity-level transactions drive volumes in 2018.
Increased activity in primary markets and heightened volume of entity-level acquisitions led to a 16.4 percent rise in transaction activity in the U.S. in 2018. But economic growth—in the U.S. and abroad—will slow in 2019. This will lead to more divergent real estate market performance fundamentals. On the other hand, the Federal Reserve’s recently less hawkish stance, and continued strong job growth figures, will balance some of these pressures.
The following themes are expected to shape investor behavior in the months ahead:
Key themes
Transactions
Investor attention is increasingly shifting to liquid and secure markets and asset types.
Global capital
The composition and behavior of cross-border buyers has marked notable shifts during the past 12-18 months, with the U.S. becoming a less attractive investment destination for investors hedging their currencies.
Debt
Debt availability remains strong as the agency lenders and life companies continue to increase origination levels.
Sector snapshots
U.S. multifamily investment outlook
Multifamily transactions reach new high in 2018 as elevated demand improves fundamentals.
U.S. office investment outlook
Transaction volumes increase 5.0 percent as investors focus on primary markets.
U.S. industrial investment outlook
Transaction volumes in industrial sector reach new annual record, driven by transactions over $500.0 million.
U.S. retail investment outlook
Entity-level transactions in 2018 lead to banner year for retail investment.
U.S. hotels investment outlook
Hotel transactions surge in 2018 driven by the sale of luxury assets, resorts and portfolios.
U.S. net lease investment outlook
Net lease transaction activity remains robust, with sentiment strongest for industrial assets.