Things are looking up for the U.S. real estate market. After a turbulent year in 2016, the U.S. economy and property markets appear positioned to perform well in 2017, according to the latest U.S. Macro Forecast from Cushman & Wakefield. Even late last year, the U.S. economic fundamentals showed signs of warming up.
What RICH Club member and other real estate investors want to know is, which real estate sector is primed for the biggest growth in 2017?
There are a few contenders. Commercial real estate executives are upbeat on industrial, infrastructure, and multifamily asset classes for 2017, according to the 2017 Real Confidence Executive Index from Altus Group, in partnership with NAREIT and the National Council of Real Estate Investment Fiduciaries (NCREIF). The industrial sector took the top spot as the preferred asset type for investment, with a 40-percent year-over-year allocation increase in private equity selections and a 61-percent increase in REIT selections.
The Index indicates that real estate execs are upbeat about the near-term outlook for consumer spending trickling into robust demand for warehouse and distribution space, particularly as eCommerce sales as a share of total retail sales continues to rise.
Moreover, with year-over-year growth in manufacturing production expected to rebound into positive territory this year and with auto sales expected to remain in the 17–18-million-units-per-year range for the next two years, the outlook for the overall industrial sector remains bright.
In the index, multifamily was the second investment choice among respondents for both private equity and REITs. The year-over-year allocation increase was minimal for REITs, but 27 percent higher for private equity.
Are industrial, multifamily, and infrastructure at the top of your list for 2017? Or do you plan to invest elsewhere? Join the conversation on Facebook and let us know!