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Equity Casts Wider Net in Search of Yields

CHICAGO—Competition is forcing many investors to widen their scope to consider riskier assets and those in secondary markets.

By Sule Aygoren | Updated on November 07, 2013

CHICAGO—Equity investors from across the spectrum, from pension funds and REITs to domestic sources and international ones, have stockpiled cash for commercial real estate purchases—and US investment sales continue to exhibit significant momentum as 2013 heads to the finish line. Safety and stability remain top of mind for investors, according to Jones Lang LaSalle‘s Capital Markets experts, but heated competition for suitable properties is forcing many investors to widen their scope to consider riskier assets and those located in secondary markets as they search for better pricing and higher yields. The ongoing brisk pace of investment sales and investors’ growing appetites for non-core assets highlight the conversation at the Urban Land Institute‘s Fall Conference, currently taking place here.

Through the first nine months of the year, private capital remained the most abundant source of investment dollars, accounting for 43% of the sales volume. Institutional equity and REITs supplied 23% and 19% of the sales volume, respectively. Canada was the largest source of foreign capital in the US investment sales market during the first three quarters, followed by Singapore, China and Germany. 

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