Investor Sentiment Survey

Today we’re talking about investor sentiment surveys. Head over to our YouTube channel or check out this article from the National Real Estate Investor to learn more.

In our commercial real estate segment this week, we wanted to refer you to an investors survey that’s been going on for about 16 years. It’s proved to be fairly accurate. They do it twice a year (the first half and the second half), and there are a couple of interesting things to note here.

Clearly after the first half, which they did in the spring, there was a tremendous drop from the second half of 2019, from a level of 166 down to 140. Due to the pandemic nobody knew what was going to happen. People didn’t go to work anymore. What’s going to happen to commercial office space, retail stores, and the like?

Well, we’re 10 months into the pandemic now, and there’s been quite a bit of real estate activity M&A-wise, transaction-wise, and the world has somewhat calmed down. As of today, people are actually getting the vaccine, and by the end of Q1 2021, we think there may be as many as 100 million people vaccinated just in the United States alone. This is great news, but the second half survey was still somewhat sketchy.

We’ve provided a couple of graphs here, as well as a link to this article by the National Real Estate Investor. When you dig down into the guts of it, you will see that there are different levels of confidence based upon the type of real estate that these investors invest in. Very high confidence in the multi-family sector, as you might imagine. People have always got to live somewhere. High confidence in industrial. We still have a manufacturing expansion going on in this country, not to mention the move to online retail. All that product has to ship from somewhere, so industrial warehouses are high in demand as well.

This is a very interesting study that we’ve followed for a while and wanted to share with you this week. As always, if you’d like to discuss it further, you know how to reach out to us at Harvard Grace!

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