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Nine Must Reads for CRE Investors Today (March 2, 2023)

Private investors overtook institutions as the biggest global investors in commercial real estate, according to Knight Frank’s latest wealth report. Apartment sales fell 71 percent year-over-year in January, reports Multifamily Dive. These are among today’s must reads from around the commercial real estate industry.

  1. Private Investors Overtake Institutions as Biggest Global Investors in Commercial Real Estate “Private investors were the most active buyers in global commercial real estate investment in 2022 with $455 billion invested, or 41% of the total, according to Knight Frank’s capital flows tracker The Wealth Report.” (CoStar)
  2. Apartment sales fall 71% “Apartment sales volume plummeted 71% year over year in January to $6.2 billion, according to a report that data firm MSCI Real Assets shared with Multifamily Dive. Despite the steep decline, transactions remain well above the $1 billion and $2 billion posted in the month following the global financial crisis of 2007-2009.” (Multifamily Dive)
  3. As Americans Work From Home, Europeans and Asians Head Back to the Office “Bigger homes, longer commutes and a tighter labor market help explain why Americans spend less time in the office than Europeans and Asians, workplace consultants say. This divergence in return-to-office habits not only benefits overseas landlords more than their U.S. peers.” (The Wall Street Journal)
  4. BREIT Fulfills 35% Of Investors' February Withdrawal Requests “Blackstone Real Estate Income Trust fulfilled just over a third of the repurchase requests it received from investors in February, totaling about $1.4B, according to a shareholder letter posted Wednesday. BREIT received $3.9B in repurchase requests last month, down 26% from January, but redemptions in any given month can only total 2% of the REIT’s net asset value.” (Bisnow)
  5. Endowments, foundations expect to increase alternatives allocations – CAPTRUST “Among the 169 organizations with between $10 million and $250 million in assets that were surveyed, 116 said they expected to make some kind of change to their asset allocations, according to survey results released Thursday.” (Pensions & Investments)
  6. Why Private Equity Is Targeting Individual Investors “The opportunity can be captured in two numbers: 50% and 16%. Individual investors hold roughly 50% of the estimated $275 trillion to $295 trillion of global assets under management (AUM). Yet those same investors represent just 16% of AUM held by alternative investment funds.” (Bain & Co.)
  7. Manhattan office conversions need more affordable housing, Council says “The blueprint calls for a tax break for developers who include income-restricted units in their renovations — the kinds of apartments missing from the residential conversions currently happening throughout the Financial District.” (Gothamist)
  8. Waiting for the Thaw in CRE Deal Flow “One of the key takeaways from recent conversations generated with lenders was that nearly all of them are actively seeking retail loan opportunities. Improved indicators, such as occupancy and overall rent, have resulted in more favorable underwriting in the sector.” (Commercial Property Executive)
  9. JLL CEO Urges Patience for 'Relatively Short' Real Estate Industry Downturn “The brokerage joined rivals CBRE, Cushman & Wakefield, Marcus & Millichap, Colliers and Newmark in reporting a slowdown in deal activity in the fourth quarter. JLL reported a 7.7% revenue gain to just under $20.9 billion for the full year of 2022, with most of the growth recorded before rising interest rates contributed to capital markets freezing up in the third quarter.” (CoStar)
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