Powerhouse multifamily investors from across the globe took part in Avanath Capital CEO Daryl Carter’s “View from Investors” panel. For foreign investors seeing the European markets opening up to the migration of millennials and baby boomers and giving the U.S. Markets even more stability, investing in multifamily is at the top of their investment list.
Even with over 300,000 units under construction this year, investors aren’t showing too much concern around overbuilding. Instead, today’s savvy investors are focused on making smarter purchases in markets that have room for rental increases based on either an area seeing substantial job growth or finding property that has been under-managed.
According to a poll conducted by Morgan Stanley, the majority of U.S. Millionaires see real estate as the top alternative asset to own in 2014.
As a matter of fact, 77% of investors with a million dollars or more in assets own real estate. A third of those investors polled say that they plan to purchase additional commercial and residential this year, and 23% of these millionaire investors are planning to invest in real estate investment trusts (REIT) this year.
So, what are the factors that go into making real estate the most interesting investment market in the world?
After being named “Trendsetters of the Year” at the 17th annual Washington, D.C. TrendLines event, Transwestern and their affiliate Delta Associates released a list of the top commercial real estate trends they’ve identified for the current and future state of the industry.
Delta identifies the fact that while we had some national uncertainty in 2013, 2014 looks to be less inundated with this type of national attention.
The momentum with which the national economy is recovering is being seen as another element fueling growth. This stems from a year of seeing substantial corporate profits, high stock prices, steady job growth, and the overall growth we’ve seen in the real estate industry, the consumer confidence and spending the country needs has finally begun to return.
Rising interest rates have been a concern for investors, but in the last year while long-term rates did see an increase, they still remain relatively low. One thing to take away from rising rates is that they mark an end of cap rate compression as the overall economic picture for the country looks optimistic.
With the migration of both the younger and older demographics mentioned earlier, these moving masses are causing a demand that doesn’t look like it’s going to let up for the next several years. Because of the lifestyles that these groups live, they are requiring specific amenities and community features that, when supplied, provide investors with multiple, long-term multifamily and commercial investment opportunities.
Is real estate investing the main focus of your portfolio? If so, what are some of the biggest successes you’ve had in the last year?