The pandemic has undoubtedly slowed commercial real estate investment sales activity, but one investment group is standing apart from the rest. During the second and third quarters, institutional investors have remained net buyers, despite the uncertainty brought on by the pandemic. In fact, according to data from Real Capital Analytics, institutional investors have acquired $9.6 billion more in assets than they have sold—and they have continued to grow their portfolios.

Institutional buying patterns are divergent from the remainder of the market. During the same time period, overall investment sales volumes fell to 2012 levels. Private investors, owner-user buyers and REITs have all been net sellers during this time period. While REITs generally have more tolerance to hold assets as values dip, private investors and owner-users have more limited access to capital than institutions. That could be one reason for the discrepancy between the investment classes, RCA concludes.

However, some private investors are actually ramping up buying activity. While the overall buying trend is down, a recent report from JLL Trends & Insights, new private investors entering the market for the first time are attracted to the low competition and interest rates. These buyers are particularly interested in real estate assets of scale, according to the article. This group has been an important source of liquidity.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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