Real estate executives still consider multifamily the strongest commercial asset class. They’re also confident that foreign capital will continue flowing into commmercial real estate across the United States.
Those are two of the top findings from the ninth annual Akerman U.S. Real Estate Sector Report.
Each year, national law firm Akerman – which has Midwest offices in Chicago and Madison, conducts a real estate survey with its clients and real estate executives. The survey is designed to provide the a C-suite view of the state of the commercial real estate market.
In this year’s survey, 63 percent of respondents said that multifamily will be the most active commercial segment in 2018. This is a change from 2017’s survey, in which 43 percent of commercial real estate leaders predicted that single-family homebuilding would outpace multifamily development.
Executives also told Akerman that foreign capital will continue to fuel the commercial real estate market, with overseas investors continuing to pursue U.S. assets. Respondents said that overseas investment in commercial real estate remains at a record high, the vast majority of these foreign dollars coming from Europe.
Private equity remains important to the commercial real estate industry, with 57 percent of survey participants naming it the top source for real estate equity and debt. Banks ranked high, too, with 48 percent of respondents pointing to them as the leading vehicle for real estate funding.
Job growth, of course, is key to a healthy commercial real estate market. In good news, then, 66 percent of executives told Akerman that job creation in 2018 will either marginally or significantly higher than in 2017. An additional 29 percent of respondents said job growth will be about the same as in 2017.
Just 5 percent said that job creation will be lower in 2018 than in 2017.