Global investors are holding onto an estimated $540B in capital to deploy in commercial real estate assets worldwide.
JLL's Global Capital Markets team unveiled that limited partnership investors have run into a dilemma: there is an abundance of available capital to deploy but a lack of attractive real estate to buy. As a result, global investors are sitting on billions in dry powder, Institutional Real Estate reports.
Commercial real estate has long been considered an attractive investment because it offers a stable cash flow and low interest rates compared to many other investments; but quality properties are not as readily available as they once were, causing investors to hold off on entering the market until better stock comes along.
Investors are also facing more risk because of elevated pricing and political uncertainty, forcing buyers to be more selective and conservative about where and how they deploy their capital.
JLL estimated by the end of the year, global investment volumes will be on par with 2016, which showed volumes of $650B.
In terms of investment capital, Europe leads the pack with $274B of capital demand while Asia Pacific has $103.4B, the Americas have $63.1B and the Middle East has $39.6B.
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