Looking at other property types, the report cites expectations for office to remain a top investment in 2018 because of its stability, especially for foreign investors. “Specifically, suburban office space is expected to outperform CBD from
 a risk-adjusted return perspective because it's often easier to adjust suburban space to new consumer and employee preferences,” the report states.

Conversely, retail is likely to remain volatile in '18, although high street and grocery-anchored neighborhood/community centers are expected to perform well. However, traditional strip centers and some big-box retailers continue to face strong headwinds as shoppers move toward “experiential retail” and e-commerce. E-commerce is good news for industrial, of course, as is continued growth in manufacturing.

'We can expect a slowdown in the
hotel market's historic expansion, as foreign investment is slowing down and occupancy rates are leveling off,” the report states. New supply is expected to keep pace with increased demand this year.

Regardless of performance variations among property sectors, Expectations & Market Realities expects continued capital inflows into commercial real estate. “Amid the ongoing US political drama that is expected to continue in 2018, the stable income component with modest appreciation from CRE provides an attractive choice in the uncertain future of alternative investments such as stocks and bonds,” says Ken Riggs, president of Situs RERC. “Risk-adjusted returns for CRE are favorable to other asset classes over the long term and provide investment diversification.”