A recent survey of commercial real estate investors ranked Phoenix as a Top-10 target among America’s metros. The Sun Belt market jumped five spots to #4 in CBRE’s 2021 Americas Investor Intentions Survey.
The survey found that more investors are prioritizing secondary markets in 2021 (as opposed to gateway markets), particularly those with strong job and population growth prospects, which can translate into greater potential for both equity and income growth. Sun Belt markets are the most appealing: Austin is the top preferred market, followed by Dallas.
The survey findings also reveal the sustained appeal of tech-driven markets. Austin, Denver, San Francisco, and Seattle ranked among the top 10 markets for the sixth straight year.
- In a clear sign that risk tolerance is growing, 30 percent of investors say they are targeting opportunistic and distressed assets in 2021 – this is a record level and compares with 16 percent in 2020.
- For the first time in the seven-year history of the CBRE survey, large investors (those with assets under management of more than $50B) are more interested in secondary markets than primary markets.
- Pricing will be aggressive for logistics and multifamily assets in 2021, while discounts will be expected for other asset types.
- Investors are expanding the types of properties on their shopping list, with 72 percent of respondents actively pursuing investment in one or more real estate alternatives in 2021, up from 54 percent in 2020. Life science labs, medical offices and single-family rentals are the most popular targets, followed closely by data centers and cold-storage facilities.
More than half of survey respondents have adopted Environmental, Social and Governance criteria (ESG) as part of their investment strategy. (Source)