Investor Preference for Commercial Real Estate Drops for Fifth Consecutive Quarter

Research says the investor preference for commercial real estate dropped for the fifth consecutive quarter. Reports say the data is at a record low in the first quarter.

The SitusAMC reported in the most recent quarterly ValTrends research that the investor preference for the commercial real estate has dropped for the fifth consecutive quarter to a record low in the first quarter.

According to Bubny, the decline in investor preference can be attributed to short-term economic uncertainty and decreasing values. Because of the market volatility, the rate for stocks has become slightly lower and the investor preference for bonds had become the highest since 2007.

Further reports say that the trends in capital availability have started to resemble those observed in the depths of the Global Financial Crisis. Even though the availability of equity capital was unchanged in the first quarter, it was the lowest level it has ever been since the debt and equity were monitored separately in 2014.

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Investor Preference for CRE

An article in The Economic Times states that investors continue to view apartments as the top commercial real estate sector. However, the investor preference declined significantly from quarter to quarter until it reached its lowest level since the beginning of the COVID-19 pandemic. The investor preference for retail increased to 31% from 11% in 2022, while the investor preference for office remained at the bottom of the rankings.

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