Why Investors Are Bullish on Build-to-Core Deals

Los Angeles

AECOM and Canyon Partners are bullish on build-to-core investment opportunities. The two have formed a partnership to develop institutional quality assets across product types, including multifamily, mixed-use, office, hospitality, and condominiums. In terms of geography, the joint venture will focus in the top 25 markets across the US. The firms believe that this niche offers the best investment opportunity in today’s market.

“In today’s market, we believe build-to-core offers one of the best opportunities across commercial real estate due to a structural supply/demand imbalance,” an unnamed source at AECOM-Canyon Partners tells Globest.com. “There is significant demand for new core assets, but supply is constricted as a result of a constrained capital markets environment this cycle, in large part driven by tightening lending restrictions, including those related to Basel III. This supply/demand imbalance has created opportunities where there is a material spread between the cost to build core projects and the valuations for those core projects once built and stabilized.”