Institutional investors—sovereign wealth funds, insurance and pension funds—intend to be strong net buyers in 2017. More than half (54%) of all institutions plan to deploy more than $1 billion of capital in the Americas this year. Marking a departure from the wider pool of survey respondents, institutions are still primarily focused on core assets, closely followed by value-add. CBRE Research estimates that SWFs in particular are under-allocated to commercial real estate—with top 20 SWF's allocating an estimated 3% of total assets to real estate—which accounts for expected higher levels of capital deployment.

“While it is no secret that we are in a tight capital climate, financing remains for signature projects,” Phillip Sosnow, a real estate partner at Bilzin Sumberg, tells GlobeSt.com. “In fact, our firm has closed more than $2.5 billion in new financing since the beginning of 2016, and anticipates closing three-fourths of a billion dollars in new loans in the first quarter of this year alone. Today lenders are selective, favoring assets with strong sponsorship and in premium locations. As traditional lenders have been operating at a more conservative pace and limiting financing to conventional or 'in the box' deals, alternative lending has emerged as an attractive option for developers seeking more complex financing.”

MIAMI—The prospect of increased US economic growth combined with less regulation, means that investor sentiment for commercial real estate investment is marginally more positive than last year, despite the potential for rising interest rates. That's according to the CBRE Americas Investor Intentions Survey 2017.

The 2017 survey results reveal that investors will remain actively engaged in real estate investment this year, with the majority (67%) intending to be net buyers—more acquisitions than dispositions. The percentage of net buyers has increased since 2015 (60%) and 2016 (65%). The vast majority of these investors (83%) intend to maintain or increase their purchasing activity in 2017. (Find out what commercial real estate investors are most concerned about right now.).

“While investors expect to largely maintain last year's investment activity levels, they also intend to retreat on the risk curve, becoming more conservative in strategy and risk appetite. This is counterbalanced by the search for yield,” says Brian McAuliffe, president, Institutional Properties of Capital Markets at CBRE. “Echoing concerns that arose at the beginning of 2015, investors perceive the global economy and rising interest rates as the greatest threats to property markets; they also continue to have concerns about asset pricing. If the anticipated level of inflow into commercial real estate materializes, this should to some extent counteract any pricing pressure resulting from a rise in interest rates.”

Investors continue to be strongly interested in US gateway markets. Half of the investors surveyed (51%) are primarily searching for yield, relative to both government bonds (30%) and other asset classes (21%). This trend is even more pronounced among institutional investors, with 53% searching for yield.

Institutional investors—sovereign wealth funds, insurance and pension funds—intend to be strong net buyers in 2017. More than half (54%) of all institutions plan to deploy more than $1 billion of capital in the Americas this year. Marking a departure from the wider pool of survey respondents, institutions are still primarily focused on core assets, closely followed by value-add. CBRE Research estimates that SWFs in particular are under-allocated to commercial real estate—with top 20 SWF's allocating an estimated 3% of total assets to real estate—which accounts for expected higher levels of capital deployment.

“While it is no secret that we are in a tight capital climate, financing remains for signature projects,” Phillip Sosnow, a real estate partner at Bilzin Sumberg, tells GlobeSt.com. “In fact, our firm has closed more than $2.5 billion in new financing since the beginning of 2016, and anticipates closing three-fourths of a billion dollars in new loans in the first quarter of this year alone. Today lenders are selective, favoring assets with strong sponsorship and in premium locations. As traditional lenders have been operating at a more conservative pace and limiting financing to conventional or 'in the box' deals, alternative lending has emerged as an attractive option for developers seeking more complex financing.”