2016 AFIRE Foreign Investment Survey

The Association of Foreign Investors in Real Estate (AFIRE) has released its 24th annual survey of members which shows that 64% of respondents say they expect to have modest or major increases in their investment in US real estate in 2016, with another 31% indicating they expect to maintain or reinvest their investments. According to the survey, none of the members, who are among the largest international institutional real estate investors in the world and have an estimated $2 trillion or more in real estate assets under management globally, have plans for a major decrease in the US commitment. The survey was conducted in the fourth quarter of 2015 by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.

"The investment opportunity is the United States, itself," said James Fetgatter, chief executive of AFIRE, in a press release. "The real estate fundamentals are sound; the economy continues to remain strong; there are opportunities across all sectors of the real estate spectrum and in both gateway and secondary cities. The recent legislation bringing welcome relief from certain FIRPTA taxes should provide additional incentives for foreign investment into the US. In an environment that is regarded both as the safest and most secure in the world, with a strong currency and the best opportunity for capital appreciation, the US is the safest harbor."

Highlights of the AFIRE survey include:

• 60%t of respondents said the US was the country providing the most stable and secure real estate investments. By comparison, Germany, which came in second, had only 19% of the vote.

• With 46% of the vote, the US was also cited as the country providing the best opportunity for capital appreciation. Brazil, second in this category, received 17% of the vote.

• 85% of respondents said their perspective on the viability of the US real estate market was unchanged over last year, although 80% of respondents said it was "very" (35%) or "somewhat" (45%) difficult to find attractive US real estate investment opportunities.

To reviews graphs of the survey data, click here. For more news and information visit Blumberg Partners.

KPMG CRE Outlook Survey Results

KPMG LLP, the audit, tax and advisory firm, completed the 2012 KPMG Commercial Real Estate Outlook Survey with reflections and responses of nearly 80 senior executives in the commercial real estate industry. The survey found that CRE executives remain focused on efficiency and cost cutting as the commercial real estate market continues to rebound in a lackluster economy.

"Commercial real estate executives are seeing their margins and profits being squeezed, so increasing operational efficiency and reducing costs is a key focus," said Greg Williams, national leader of KPMG LLP's Building, Construction and Real Estate practice. "At the same time, there is tempered optimism as industry fundamentals continue to slowly improve and bright spots emerge... Commercial real estate execs are finding it challenging to source sufficient product that will produce the necessary yields to meet investor expectations. The gap between ask and bid price can still be significant in certain markets," said Williams. "It's also taking a lot longer to raise capital needed to grow their portfolios, while increased regulatory reporting requirements are driving up costs."

58% of the respondents expect the U.S. economy to improve next year, but they remain guarded about an economic recovery. In fact, 63% do not expect the economy to recover as a whole until 2014 or later - as opposed to 77% who, in the 2011 KPMG survey, predicted the recovery would be complete by the end of 2013.

For more news and information visit Blumberg Capital Partners.

PWC Survey Results: CRE Market Picking Up

PricewaterhouseCoopers' first-quarter report, which surveyed U.S. real estate investor confidence, shows that the commercial real estate sector is expected to remain in recovery mode in 2012, but added that the market for distribution and industrial real estate will likely become one of the hottest CRE sectors between 2013 and 2015. According to a Wall Street Journal report, real estate executives who responded to the survey said they expect investor interest in those properties to grow with an expansion of the economy and consumer spending.

The retail outlook, however, is a little more bleak. "There's been a total paradigm shift in retail,"Mitch Roschelle, who heads PwC's real estate advisory practice. "Big box stores are being replaced from the consumer's perspective by online shopping…and too many retailers are competing with each other's sticks and bricks stores."

Nationally, more buyers are considering the rebounding industrial sector, as it demonstrates positive signs of recovery, reported the South Florida Business Journal. Warehouse demand is increasing rapidly, especially in coastal markets with international port access, according to the report.

For more news and information visit Blumberg Capital Partners.

2012 Outlook Shows Slow, "Grind-It-Out" CRE Recovery

PricewaterhouseCooper (PwC) and the Urban Land Institute (ULI) released the Emerging Trends in Real Estate 2012 survey and forecast. The report predicts a "slowing, grind-it-out economic recovery" following a period of mostly sporadic growth, confined largely to a few real estate markets. Survey participants predict that 2012 will see an increased supply of properties for sale; however, due to economic uncertainty, interest among buyers may diminish.

"Job creation is clearly the critical ingredient for a sustained recovery in commercial real estate and the market participants we surveyed uniformly struggled to identify new employment engines. As a result, businesses are focused on squeezing profitability out of productivity gains, and families forced into belt-tightening are using less square footage, which follows ‘The Era of Less' sentiment we forecast last year," said Mitch Roschelle, partner, U.S. real estate advisory practice leader, PwC. "In 2012, investors expect pricing to level off in the top markets – and overall ‘buy' sentiment will subside, selling appetites will increase, and more owners will hold until the economy untracks. This is part of 'the new normal' as investors are coming to grips that they may not be selling for more than they paid."

For more news and information visit Blumberg Capital Partners.

Third-Quarter 2010 Real Estate Investment Outlook Report

A new report titled Third-Quarter 2010 Real Estate Investment Outlook: Investors Go On Offense, finding that Improving capital markets spark renewed interest across property types, has been released by National Real Estate Investor, Retail Traffic, and Marcus & Millichap. Earlier this year the groups invited private investors and developers of commercial real estate to participate in a survey to gather market opinions; the majority of respondents were private investors (36%); private partnerships (19%) or developers (16%) with an average of $35.8 million invested in commercial real estate. The full report can be read here. An excerpt:

The exclusive National Real Estate Investor/Marcus & Millichap Investor Sentiment Index shows that investor confidence has taken a major step forward in the past year. After bottoming out in 2009 with an index rating of 91, investor sentiment rose to 113 in the first quarter and 119 in the third quarter of this year. Although the index shows that sentiment is still well off the high of 148 that occurred in 2005, the positive trend over the past year is an encouraging sign that investor confidence is returning.

The index takes into account survey responses related to expected changes in property values for various real estate sectors, as well as plans to increase or decrease total real estate holdings. The baseline of 100 indicates neutral sentiment for the industry. The trajectory shows that investor sentiment reached its high in 2005, followed by a dip to a trough in 2008 and 2009, and is now showing signs of an upswing in 2010.

For more news and information visit Blumberg Capital Partners.