“The great news is that investors con-tinue to be optimistic about commercial real estate,” says Hessam Nadji, a senior vice president and managing director at Marcus & Millichap in Calabasas, Calif. “That is even better news for the broader U.S. economy, as we know that the Inves-tor

Sentiment Index has proved to be a very accurate foreteller of economic direction.”

Investors remain firmly grounded by the challenges that remain, such as disappoint-ing job growth and tax increases that could slow economic growth. That optimism is rooted in the fact that on balance, the econo-my continues to strengthen even amid some negative headlines. For instance, retail sales are now 12 percent above their 2007 peak and corporate profits are 15 percent higher than their 2006 peak. “Investors are buoyed by low interest rates, improving occupancies and commercial real estate’s competitive yields compared to alternative investments”, says Nadji. Slightly more than half of respondents (56 percent) expect to increase their commercial real estate investments in the next year. That is down compared to third quarter results, when 63 percent of investors indicated that they were planning to increase  investment. How-ever, that dip is not a surprise considering that investors mounted a big buying spree in the fourth quarter of 2012. Investment sales topped $98 billion in fourth quarter, which accounted for nearly one-third of the total 2012 volume of $283.2 

 

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