NEW YORK / TORONTO —
Altus Group, in partnership with the National Association of Real Estate Investment Trusts (NAREIT) and the National Council of Real Estate Investment Fiduciaries (NCREIF), has released the results of the 2016 Real Confidence survey, which polled C-suite level Commercial Real Estate (CRE) executives on economic trends, demographics, consumer preferences, and the supply and demand of commercial real estate assets affected by those factors. The respondents represented a variety of real estate funds, private equity firms, listed REITs and debt-driven organizations with a combined $700 billion in assets under management. Responses were measured on the Real Confidence scale from 0 (no confidence) to 100 (absolute confidence).
CRE executives rated their confidence in the U.S. economy as 63.3, compared to 45.4 for the global economy. Respondents rated the state of the U.S. real estate industry a healthy 68.5 and showed better-than average confidence that real estate development will increase, with a 58.9 rating.
Real Confidence executive sentiment covers a broad range of issues impacting investment decisions, such as the effect of Airbnb on the hotel industry, the way technology is changing real estate and how the habits of millennials are affecting commercial real estate decisions across several property sectors.
“The Real Confidence survey uncovers trends and patterns in how CRE leaders view the industry and the economy, when making big decisions on investing,” said Robert K. Ruggles III, president of Altus Group’s RVA U.S. division. “As experts in the global commercial real estate market, Altus Group is best positioned to interpret these insights given our analytics platform and integrated offering.”
Additionally, executives were asked to allocate a theoretical $1 billion in capital into a mix of real estate investment options that would yield the highest return in 2016. The portfolio they created included private equity with a 49.3 per cent allocation, followed by REITs with 31.2 per cent of the total capital. On the debt side, private debt received a 13.3 per cent allocation, more than twice the allocation to public debt of 6.2 per cent.
The results of the Real Confidence survey are presented in a variety of articles and video interviews on Realconfidence.com.