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June 04, 2015 at 12:57 PM
Investor and lender confidence in the U.S. commercial real estate market is surging, according to the sixth annual Akerman U.S. Real Estate Industry Outlook Survey, released Wednesday by the law firm Akerman LLP.
Fifty-eight percent of real estate executives in the poll said they were more optimistic about the market this year than they were in 2014.
Thirty-nine percent cited improvement in the U.S. economy, 23% low interest rates and 15% the availability of equity capital.
For the first time in the six years of the poll’s existence, U.S. government policies took a back seat to global unrest among the concerns on executives’ minds. Just 15% cited federal gridlock as the most pressing issue facing their industry, down from 34% in 2014.
Twenty-three percent were concerned about the global economy, and 22% about interest rate uncertainty.
Executives predicted that banks, more than any other funding source, would drive financing.
Insurance companies and foreign capital would also remain key drivers of growth in the financing space, they said.
Survey participants believed that nontraditional investment vehicles would contribute even greater funding. They cited commercial mortgage-backed securities, private equity, REITs and pension funds as potential sources.
Akerman said, however, that investors and lenders remained diligent and were structuring deals with greater discipline.
This indicated that the market was on sounder footing than it was before the financial downturn, and industry players were better capitalized to withstand fluctuations in the market.
“As 2015 unfolds, the industry is seeing an all-time record of institutional equity and global equity competing for core real estate assetsRichard Bezold, chair of Akerman’s real estate practice group, said in a statement.
“As investor appetite grows and deals become more aggressive, the industry will increasingly need to focus on maintaining rationality.”
Akerman interviewed 176 clients and other top real estate executives across the U.S. by telephone in March, seeking their perceptions of the health of the U.S. commercial real estate market.
Markets Lure Foreign Investment
