CRE Executives Optimistic, by Akerman

File Type: Free Content, Article
Release Date: April 2014
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Investors and lenders are more confident in the United States commercial real estate market than they have been at any other time since the start of the Great Recession, according to the 2014 Akerman Real Estate Industry Outlook Survey. Seventy percent of the nearly 300 real estate executives surveyed between January 20 and February 7 said they have a more optimistic outlook about the market this year than they did in 2013; only 5 percent said they are less optimistic, while 25 percent said there has been no change in their outlook.

Survey respondents foresee increases in capital availability from nearly all sources except government entities. They expect private equity financing to drive CRE financing in 2014. REITs are projected to serve as a leading source of real estate debt and/or equity funding, while banks also are projected to boost funding this year. In addition, the CMBS market is expected to play a more pronounced role; a third of all respondents predict that CMBS issuance will be an active component in the capital stack this year.

Respondents expect the multifamily sector to see the most transactions in 2014, with the industrial sector coming in second, followed by the retail, hospitality, and office sectors. They expect most foreign investment in the office sector to come from Europe, followed by China and the United Arab Republic. They see most investment in the industrial sector coming from South America, followed by Europe and China.

Despite the increased optimism in the CRE market, uncertainty about government spending continues to mute confidence levels. More than half the survey respondents, 52 percent, cited government policies and Congressional gridlock as primary reasons for their lack of confidence.