Marcus & Millichap Real Estate Investment Services

Dec 7, 2007 12:36 PM

2008 Real Estate Investment Outlook: A SPECIAL RESEARCH REPORT

Concerns about financing and a sluggish U.S. economy won’t deter commercial real estate investors.

Despite a softening economy and turmoil in the capital markets, investors continue to have confidence in the U.S. commercial real estate industry. A survey of more than 1,000 private and institutional real estate investors shows only one in five respondents believe the economy will be stronger in 2008, yet the majority want to invest more funds in the sector.

“To see that a majority of investors are still planning to increase real estate holdings and that the percentage is higher than last year is a strong validation that they are separating capital markets issues from commercial real estate fundamentals,” says Harvey Green, president and CEO of Marcus& Millichap Real Estate Investment Services.

The survey, dubbed the 2008 Real Estate Investor Outlook, was conducted jointly by National Real Estate Investor, Marcus & Millichap and Countrywide Commercial. This is the fifth year in a row this exclusive survey has been administered to U.S. real estate investors.

The survey reveals that 62 percent of respondents plan to increase allocations in real estate over the next 12 months compared to 60 percent in 2006, 69 percent in 2005 and 74 percent in 2004. Only 7 percent of real estate investors plan to decrease their investments in real estate over the next 12 months (see figure 1).

“Investors are going to invest more in real estate because pricing is more attractive and they’ll be able to get slightly higher yields,” says Chris Tokarski, managing director of Countrywide Commercial’s real estate finance group. Of the investors who plan to increase their real estate holdings, the average estimated increase is 21 percent.

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Tags: austin real estate //