High-net-worth individuals with more than $1M in liquid assets invested more money in U.S. commercial real estate in 2016 than they have in two years.
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These investors made $10.3B worth of CRE investments last year, flocking to multifamily in particular with $3.5B in investments, knocking retail, their favorite asset in 2015, out of the lead. As for other property types, 33% of high-net-worth individuals opted for industrial, while retail and office both attracted 12% of total investment, CBRE reports.
While this class of investors only makes up 2% of total U.S. property owners, experts said they typically indicate where markets are heading.
As commercial prices continue to rise, 30% of high-net-worth individuals expressed concerns regarding the overpriced state of the market, a worry that was recently voiced by Equity Group Investments chairman Sam Zell. Zell has been leading the company through a massive sell-off within the past two years of 124 real estate assets his company acquired when it took over Equity Commonwealth in a 2014 shareholder revolt.
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