The industrial sector is the talk of commercial real estate executives as the one to watch in 2018 and they'd be prepared to allocate their investment there
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The industrial sector is the talk of commercial real estate executives as the one to watch in 2018 and they’d be prepared to allocate their investment there.
Altus Group has released the findings of its Real Confidence Executive Survey which found industrial is the executives’ preferred investment asset class this year.
That view is driven by the expected demand for warehousing from the e-commerce sector among others, which a third of respondents believe will account for 14% of all retail sales by 2020.
As part of the survey, executives were asked to allocate a theoretical $1 billion worth of capital in CRE assets. They allocated 42.1% of the total capital to direct real estate investments or private equity, followed by 25.3% to REIT opportunities.
Of those allocations, 33.2% was invested in industrial within the private equity selections and 30.5% in equity REITs
Private debt received a 22.4% distribution while public debt received 10.3%. Private debt financing increased 10.9% over last year, and interest in public debt increased 43% over 2017.
“Commercial real estate executives are questioning the Trump administration's ability to deliver on broader promises, such as funding infrastructure programs, and we’re seeing this impact in the survey results,” said Richard Kalvoda, Senior Executive Vice President at Altus Group. “While executives are confident in the health of the economy, the large increase in public debt allocation this year underscores their caution and the very real uncertainty in the market.”
What else worries the execs?
Along with political concerns, the executives in the Altus survey said they are worried about the potential impact of natural disasters on the US economy.
Almost half said that natural disasters are a larger economic concern than geopolitical conflicts and terrorism.
Altus Group has released the findings of its Real Confidence Executive Survey which found industrial is the executives’ preferred investment asset class this year.
That view is driven by the expected demand for warehousing from the e-commerce sector among others, which a third of respondents believe will account for 14% of all retail sales by 2020.
As part of the survey, executives were asked to allocate a theoretical $1 billion worth of capital in CRE assets. They allocated 42.1% of the total capital to direct real estate investments or private equity, followed by 25.3% to REIT opportunities.
Of those allocations, 33.2% was invested in industrial within the private equity selections and 30.5% in equity REITs
Private debt received a 22.4% distribution while public debt received 10.3%. Private debt financing increased 10.9% over last year, and interest in public debt increased 43% over 2017.
“Commercial real estate executives are questioning the Trump administration's ability to deliver on broader promises, such as funding infrastructure programs, and we’re seeing this impact in the survey results,” said Richard Kalvoda, Senior Executive Vice President at Altus Group. “While executives are confident in the health of the economy, the large increase in public debt allocation this year underscores their caution and the very real uncertainty in the market.”
What else worries the execs?
Along with political concerns, the executives in the Altus survey said they are worried about the potential impact of natural disasters on the US economy.
Almost half said that natural disasters are a larger economic concern than geopolitical conflicts and terrorism.
