In yet another sign that the commercial real estate market is in full recovery mode, Marcus & Millichap Real Estate Investment Services recently found that investor confidence in the industry has risen to new heights.
The recently released NREI/Marcus & Millichap Investment Sentiment Index rose to another record high in the first quarter of 2013, jumping three points to a standing of 174.
As Marcus & Millichap reports, this is especially good news considering when respondents were surveyed. Investors were asked about the commercial real estate market in late December and early January. In other words, they were asked about the industry in the middle of the fiscal cliff debate in Washington, D.C. But not enough the uncertainty surrounding this could dim the positive outlook for real estate investments.
And this positive outlook is no new thing: Marcus & Millichap reports that it’s been building since the fourth quarter of 2010.
“The great news is that investors continue to be optimistic about commercial real estate,” said Hessam Nadji, a senior vice president and managing director at Marcus & Millichap, in a written statement. “That is even better news for the broader U.S. economy, as we know that the Investor Sentiment Index has proven to be a very accurate foreteller of economic direction.”
Marcus & Millichap is careful to point out that investors aren’t blindly enthused about commercial real estate. They realize, for instance, that big challenges — most notably sluggish job creation — remain.
But on the whole, they are confident that commercial properties remain strong investments.
This is welcome news. We all know that the national economy is stronger when the commercial real estate industry is humming along. And the Marcus & Millichap report provides some of the best evidence yet that the commercial market truly is on a steady upward trajectory.