Results of Marcus & Millichap First Half 2022 CRE Investor Sentiment Survey
April 13, 2022 | James Sprow | Blue Vault
Marcus & Millichap’s John Chang, Senior VP, Director, Research Services, shared the investor survey results, showing opinion discrepancies between real estate investors in general compared to those who own each property type. He reports how much investors think the values of each investment type will go up in the next year. The investor sentiment survey reached its highest level since 2015.
The table below summarizes the survey’s findings for general investor sentiment, property owners’ sentiment, and the expectation for value increases in 2022 for each sector.
Apartments
Most people see the high apartment prices and assume these properties may be priced at a peak, with unsustainably low cap rates. But active apartment investors see a broad-based housing shortage that won’t go away soon and record-low vacancy rates.
Hotels
In general, investors think that hotels are still being crushed by the pandemic. But owners are seeing that occupancy rates for limited-service hotels are basically back to pre-COVID levels and the average daily rate for limited-service properties are higher than the pre-COVID rates.
Industrial
The insiders know that the supply chain shortages have been a major factor, driving the need for increased local warehouse storage to cover shipping shortfalls.
Office
Most people are unsure when or even if people will return to the office, thinking that office demand may weaken significantly. But the insiders know that office absorption has been positive and rising for three quarters in a row. There are pockets of strength especially in the suburbs.
Retail
The sector wasn’t hit as hard as many believe. As COVID mandates loosen, retail has a strong recovery trajectory.
Self-Storage
Self-storage has outperformed expectations. Vacancy rates are at an all-time low and the construction pipeline has been thinned by construction materials shortages.
Seniors Housing
This sector has the widest perception gap. Seniors housing was hit hard by the pandemic and is beginning to recover. The sector has been going through a consolidation cycle. That’s pretty much an insiders-only game. Operating profitable seniors housing properties in today’s climate requires infrastructure, strong operations, economies of scale, and industry seasoning.
Source: Marcus & Millichap, Research Video, March 28, 2022
