Results of the Investor Sentiment Index
To cover some strategies for Commercial Real Estate investors, we researched the Investor Sentiment Index. We viewed the industry across a 16-year period to assess the market’s future prospect. Despite the element of uncertainty, property values are anticipated to rise this year. We expect this increase to be around 5.2% for industrial and 5.6% for self-storage among other opportunities. It’s important to consider the variance according to property type and the geography that may influence value. There are mixed opinions on whether to hold or sell assets, but knowledge is power during these dynamic times.
Investor Liquidity Remaining High
Investors in the current climate have remarkably abundant access to capital and are seeking to increase holding over the coming year. Many investors are able to capitalize on the market even in its uncertain state. People are still staying positive in midst of the health crisis and are laying the foundation for the future. Investors are adapting to this situation by implementing a hold investment strategy. They are focusing on the yield premium cap rates in contrast to the traditional capital cost. Last year, we saw many seeking to refinance their property due to unpredictability at this time. An investor’s ability to access capital can have many individual variables. It is important to assess your unique position to determine the appropriate action.
Resilient Sectors Surviving With Divergent Strategies
There are some key differences between property types that will affect the total worth in the end, and some sectors are more resilient than others. A majority of investors believe that now is unquestionably the time to be buying. Industrial properties, such as warehouses are an example of an area that we saw grow during the pandemic. One of the most prevalent strategies in dealing with the hazards of illness during the modern era is to implement more online platforms and services. This reduces contact and in some cases makes the process of doing business much smoother. A majority of industrial property owners anticipate the worth will continue to rise even if Covid-19 surges in future, and their confidence should be taken into consideration when purchasing a property. E-commerce is a growing industry that has also been utilized more during these times by industrial properties.
Apartment Sector a Predicted Increase
The investment confidence in apartments is still high. A 5.1% increase in property value is anticipated over next 12 months. This may be a good starting point for investors seeking something that will most likely remain stable for the future. One variable to consider when purchasing an apartment sector is that government policies are subject to change. This is especially true during the current health crisis and recession. Around half of the experts believe that it would be the wisest decision to hold on to your apartment assets during this time.
Opportunities in Commercial Real Estate
Many respondents will agree that investing in CRE can be highly rewarding with the right strategies for commercial real estate investors. Certain factors surrounding real estate will influence future outcomes. These factors can include whether we receive another relief of any kind from the federal government; how we overcome the virus with current vaccine efforts, or until a concrete medical solution is developed. Although these are uncertain times, one can still have confidence investing in commercial real estate.
