On a global scale, says Rose, “Canada and the US are performing well, benefitting from global investors' perception of them as safe havens as well as stable domestic activity in both countries. Although the US is, perhaps, being held back by uncertainty surrounding the upcoming presidential election, this short-term investor hesitation should dissipate once the election is behind us.

“Meanwhile, initial fears resulting from Brexit are also proving to be a short-term check on activity, and we've seen smart money taking advantage of a disruption in the market,” he continues. “And in Germany, investors have a variety of opportunities to capitalize on the country's diverse available assets.”

TORONTO—Investors are continuing to tune out the noise and focusing on US commercial real estate to find the yields that may elude them elsewhere, Avison Young says in its Fall 2016 North America, U.K. and Germany Commercial Real Estate Investment Review. “Irrespective of the ongoing conversation around potential interest-rate hikes and new geopolitical factors such as the Brexit fallout, abundant capital continues to seek the stability and returns that the commercial real estate sector still offers,” says Mark Rose, chair and CEO of AY. The report covers 51 markets across the US, Canada, the UK and, for the first time, Germany.

“Historically low interest rates continue to fuel our industry,” Rose says. “Simply put, if there were some adverse event that caused interest rates to move up, we would have a correction—and that's not necessarily a bad thing.” At present, though, “we don't expect to see rates move for a considerable period of time, thus keeping commercial real estate top-of-mind with many investors, compared with alternative investments.”

Domestically, AY says that despite some overall moderation of volume compared to the year-ago period, real estate remained an attractive investment in this year's first half. AY cites a tremendous amount of capital chasing core, core-plus or opportunistic deals during the past year, with strong demand for all asset types.

“The US is viewed as a safe haven among investors fleeing global economic uncertainty in favor of the nation's relatively stable real estate market and yields,” says Earl Webb, president, US operations at AY. “Despite lower sales volume in some markets year-over-year, compressed cap rates and reported pricing indicated a sustained seller's market with activity limited more by deal scarcity than investor demand.”

On a global scale, says Rose, “Canada and the US are performing well, benefitting from global investors' perception of them as safe havens as well as stable domestic activity in both countries. Although the US is, perhaps, being held back by uncertainty surrounding the upcoming presidential election, this short-term investor hesitation should dissipate once the election is behind us.

“Meanwhile, initial fears resulting from Brexit are also proving to be a short-term check on activity, and we've seen smart money taking advantage of a disruption in the market,” he continues. “And in Germany, investors have a variety of opportunities to capitalize on the country's diverse available assets.”