6 Property Types You Should Invest In This Year

Posted on July 24, 2015

Virtually everyone agrees we’ve hit a sweet spot when it comes to investment in U.S. commercial real estate assets, but you may be wondering specifically what type of real estate to invest in, as a neighborhood shopping center may offer very different returns from an apartment building. To make such decisions easier, research and valuation firm Situs RERC performs quarterly surveys of industry insiders and ranks investment conditions for various property sub-types based on their responses. The survey is based on a scale from 1 to 10, where 1 means investment conditions are poor, and 10 means investment conditions are excellent. Here are preliminary results for the most attractive assets types cited for the second quarter 2015 survey, responses for which were collected in April, May and June. Final results for the survey will be released on Aug. 10.

 

Industrial Warehouse:

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Investment conditions rating: 7.6. With e-commerce growth and a renaissance of U.S. manufacturing, the industrial sector has also been out-performing this year. In addition, an active home-building industry will lead to more demand for warehouse space.

Apartment:

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Investment conditions rating: 5.9. Apartment buildings are selling at a premium as rents continue to climb up.

Hotel:

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Investment conditions rating: 6.4. After being among the worst-hit property sectors during the downturn, hotels are reaping the benefits of a growing economy.

Student Housing:

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Investment conditions rating: 6.5. Demographics are the driving force behind the success of this sector and many buyers have taken notice.

Neighborhood Retail:

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Investment conditions rating: 6.6. Whether the economy is expanding or contracting, everybody needs to eat, so neighborhood shopping centers continue to be highly prized.

Office CBD:

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Investment conditions rating: 6.6. Prices on office buildings in Central Business Districts (CBDs) are showing more robust growth than any other property type right now.