Rose: ‘Abundant Capital’ Still Seeks Out CRE

“Historically low interest rates continue to fuel our industry,” says Mark Rose at AY.

TORONTO—Investors are continuing to tune out the noise and focusing on US commercial real estate to find the yields that may elude them elsewhere, Avison Young says in its Fall 2016 North America, U.K. and Germany Commercial Real Estate Investment Review. “Irrespective of the ongoing conversation around potential interest-rate hikes and new geopolitical factors such as the Brexit fallout, abundant capital continues to seek the stability and returns that the commercial real estate sector still offers,” says Mark Rose, chair and CEO of AY. The report covers 51 markets across the US, Canada, the UK and, for the first time, Germany.

“Historically low interest rates continue to fuel our industry,” Rose says. “Simply put, if there were some adverse event that caused interest rates to move up, we would have a correction—and that’s not necessarily a bad thing.” At present, though, “we don’t expect to see rates move for a considerable period of time, thus keeping commercial real estate top-of-mind with many investors, compared with alternative investments.”