LA is top target for US real estate investors in 2019: report

Nationwide, industrial and logistics are most preferred property types; multifamily is close No. 2

Los Angeles /
Mar.March 07, 2019 03:00 PM
Los Angeles has been the top target for commercial real estate investment in the country since 2016 (Credit: Wikipedia and iStock)

Despite signs of a slowing housing market and other warning lights in the real estate market, Los Angeles remains the top target for commercial investment among metro areas.

That’s according to CBRE’s newly-released Investor Intentions Survey. The L.A. region has been the top-ranked target investment area since 2016, according to the report.

Nationwide, there are signs that expected returns will drop, but the survey showed investors will remain active, with 98 percent of respondents saying they intend to make acquisitions this year.

Still, there has been a pronounced shift toward greater caution, with investors who are saying they will maintain or increase spending down 13 percent from 2018, according to the report.

Pricing is at or near the previous peaks for most asset types in prime locations, so investors are seeking yield in secondary markets and alternative asset types.

Although Southern California maintained the top rank for property purchases — and Dallas was second — an increasing number of investors are shifting their attention to smaller markets like Denver or Las Vegas.

Real estate debt remains the most common of the niche sectors at 52 percent. Self-storage, seniors housing and student housing were the next most popular — each favored by nearly 30 percent of investors.

Meanwhile, industrial and logistics are still the preferred property types, cited by 39 percent of investors as the most attractive going into 2019. The Inland Empire leads the nation in major warehouse leases, according to a recent report.

Multifamily closely followed, with 37 percent of investors naming it as the next most attractive property type, up from 20 percent in 2018. In Southern California specifically, “multifamily continues to be a sought-after category, given the area’s population growth and shortage in housing,” said Natalie Dahl of CBRE capital market business. Office was third, cited by 10 percent of investors.


Related Articles

arrow_forward_ios
HBC's Richard Baker with  9600 Wilshire Blvd (SFA, Cornell)
Historic Saks Fifth Avenue complex in Beverly Hills eyed for redevelopment
Historic Saks Fifth Avenue complex in Beverly Hills eyed for redevelopment
19401 South Vermont Avenue in Torrance (Loopnet, iStock)
Atlas Capital buys Torrance flex office campus
Atlas Capital buys Torrance flex office campus
Clear Capital LLC founding partners (L-R) Daniel Hardy, Eric Sussman, Paul Pellizzon and Greg Worchell with Foothill Ridge apartments, 1334 W. Foothill Blvd., Upland (Clear Capital LLC, Foothill Ridge Apts.)
Clear Capital buys 232-unit apartment complex in Inland Empire
Clear Capital buys 232-unit apartment complex in Inland Empire
Citrus Commons project at 14130 Riverside Drive (Johnson Fain)
Apartments to rise around former Sunkist HQ in Sherman Oaks
Apartments to rise around former Sunkist HQ in Sherman Oaks
From left: Tom Brady, Dillon Rosenblatt, and  Richard Rosenblatt with 3130 Wilshire Boulevard (Kilroy Realty, Getty, LinkedIn)
Tom Brady’s NFT company signs lease in Santa Monica
Tom Brady’s NFT company signs lease in Santa Monica
Vectra CEO Raju Shah and 640 North Sepulveda Boulevard (Vectra, LoopNet)
Mostly vacant Bel-Air office building sells for $32.5M
Mostly vacant Bel-Air office building sells for $32.5M
Rexford Industrial Realty's Michael Frankel, Howard Schwimmer and 29125 Avenue Paine (Loopnet, iStock, Rexford Industrial Realty)
Rexford bypasses rate hike on $218M spree of deals
Rexford bypasses rate hike on $218M spree of deals
Rendering of 2641 West Olympic Boulevard (CORbel Architects)
K-town developer envisions new hotel on Olympic
K-town developer envisions new hotel on Olympic
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...