Investment Activity Up for First Half of Year

Investment capital flows were strong in the first half of the year. According to recent research from Colliers Internationals, investment activity is up 4% over the first half of 2017. Southern California is keeping pace with the national investment trends, with investment activity up for the first half of the year, and multifamily and industrial asset classes are leading in popularity. The momentum is expected to stretch into 2019.

“Southern California is the largest most dynamic market on the West Coast, and there doesn’t seem to be any slow down in the appetite from investors,” Mike Kendall, executive managing director at Colliers International, tells GlobeSt.com. “It has been exceptionally robust, and the only thing that is limiting increases in investment volume. There is still not enough product being sold to satisfy the demand.”

Multifamily has been the most active investment class this year. In addition to the strong fundamentals and healthy demand, there is also a significant housing shortage in Southern California. “There is not enough housing in Southern California for the population and there are challenges to building more, and there are also challenges to ownership,” says Kendall. “That is benefitting the multifamily market. On the industrial side, we have never seen vacancy rates as low as they are and demand is very high from the occupier standpoint. In the coastal market, there are high barriers to entry, so we don’t see a problem on the horizon from an oversupply standpoint, although you may see that happening in some of the interior markets, like Dallas, where the barriers to entry aren’t as high.”