Today, let’s talk about a survey of institutional investors from the Pension Real Estate Association (PREA), the European Investors Non-Listed Real Estate Vehicles Association (INREV), and the Asian Association of Investors (ANREV). A lot of people were surveyed, and one of the most notable things that came out of the survey was that most institutional investors are planning to increase their allocation in commercial real estate in 2021. As a matter of fact, 95 percent of all the respondents said they plan to increase the amount they invest in real estate in ’21 over what they did in 2020. They reported that last year about 9.3 percent of their investment portfolio was real estate related and 22 percent of investors based outside of North America are planning to invest in North American real estate in 2021.
There are lots of good takeaways from this survey. Institutional investors are looking for opportunistic investment vehicles, rather than just direct ownership, and one of the most interesting things is that a lot of the institutional investors are taking a closer look at smaller cities, outside of just the big majors around the country. The survey also confirmed what we’ve been talking about for a few months now: the heavy increase in industrial real estate. It’s the most popular asset class of the last 12 months and beyond.
If we can help you respond to these trends, just let us know!