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December 2, 2019

Exclusive Research: Caution Creeps In


National Real Estate Investor
By Beth Mattson-Teig

High net worth individuals (HNWIs) have emerged as an avid group of commercial real estate investors in recent years. Yet even as allocations to the asset class remain strong, investors are treading carefully amid concerns about slowing growth and the near-term economic outlook.

The latest NREI research report on HNWI commercial real estate activity shows a continued healthy appetite to expand commercial real estate holdings. More than half of respondents (53 percent) said they expect HNWIs to increase allocations to real estate over the next 12 months. Specifically, 35 percent predict an increase of 5 percent or more and 19 percent predict a slight increase of less than 5 percent. One-third (34 percent) believe allocations will remain the same, while those who think allocations will decline in the coming year are in the minority at 10 percent.

Expectations for allocations show some uplift compared to last year's survey. Over the prior three years, views on allocations had been trending lower. In 2016, 59 percent of respondents predicted a rise in allocations as compared to 55 percent in 2017 and 49 percent in 2018. Anecdotally, some sponsors are seeing an uptick in interest from HNWIs for a variety of reasons. Read more.

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