Investment in Commercial Real Estate favored by institutions – Survey

Investors in business prospects, by nature always select the most profitable vehicle for their funds portfolio, so to get maximum return on investment. Commercial real estate investment, through real estate deals has been the favorite of institutional investors in U.S. – according to a latest survey.

A new study on institutions taken up by J.P. Morgan Asset Management, under the title “Market Pulse: Alternative Assets Survey” shows that these investors prefer commercial real estate and infrastructure as alternative investments over stocks etc.

On an overall assessment of all the investment potentials like – Private Equity; Hedge Funds; Other Real Assets; Commodities; and Infrastructure – investment option on Commercial Real Estate holds 24% share among the survey respondents.

Who were the survey panelists? Well – only institutions in the know – 349 North American investors from 325 institutions participated in the above online survey, conducted in March and April this year. Representation included public pension funds, corporate pension plans, endowments, foundation and similar others.

These investors reportedly believe – over the next 12 months there will be significant rebound in the commercial real estate sector. That is the reason why they are shifting from traditional investment options, to this alternative option of commercial real estate.

The head of market research and development at J.P. Morgan Asset Management is reported to have expressed optimism of these investors pushing more capital into commercial real estate, over the next two to three years.

However there is report on – 25% of respondents expressing doubt about the timing of rebound, anticipated in the commercial real estate sector – and said it will get worse still over the next 12 months.

On the question of commercial estate rebound taking place – 55% of respondents in the survey were of the opinion that 2011 will be the year, when the rebound would take place; 10% say it will happen in 2010; 18% hoping that to become a reality in 2012 and 13% anticipate it in 2013.

Whatever it is – the very hope that commercial real estate will take the path of rebound from the present uncertainty and gloom prevailing – is encouraging statement for all those related with U.S. Commercial Real Estate business. More so, coming as it does from people “in the know”.

Posted by Amitesh Kumar on Jul 23 2010. Filed under Economic Updates. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry