Investors are very bullish on the outlook for the commercial real estate sector, and they are backing up that confidence by investing more capital. Exclusive results from the third quarter NREI/Marcus & Millichap Investor Sentiment Survey show that a majority of respondents—70 percent—plan to increase their commercial real estate holdings over the next 12 months. An additional 24 percent expect investments to remain the same, and only 4 percent of respondents expect their real estate portfolio to decrease over the next year.
The desire to buy more property took a notable jump compared to survey results from the beginning of the year when 59 percent of first quarter respondents said they planned to increase their commercial real estate investment. “That is a profound statement,” says Hessam Nadji, chief strategy officer and director of specialty groups at Marcus & Millichap in Calabasas, Calif. “The message from the survey is that once again commercial real estate has plenty of runway.” Survey results also show a very high expectation that properties will continue to log further gains in rents, occupancies and property values. “By no means are we nearing a point where the cycle is close to topping out or running out of steam,” he says.