Markets become volatile when investors harbor deep concerns about near-term trends and asset valuations. So far in 2016, concerns abound, including:
All of this is posing as a challenge for many investors, leading to uncertainty on how to best proceed and resulting in feelings of apprehension.
Despite the uncertainty, investors are cautiously optimistic, with the majority planning on staying the course. In fact 82 percent of global investors surveyed in CBRE’s Global Investors Intentions Survey said they were going to invest the same or more globally in 2016 compared to 2015. Additionally, the report found that more than $1.1 trillion of global capital will target real estate investments in 2016, which represents a significant increase over 2015 investments at $876 billion. Chris Brett, CBRE’s Head of International Investment in the UK, notes, “Despite investor concerns about the global economy, we see increasing amounts of capital moving globally in 2016 and beyond into commercial real estate.” Yet, the trepidation is causing investors to protect themselves, looking towards safe havens such as the U.S. According to research, 65 percent of investors are expecting to buy more assets in the Americas than they bought last year.
Keep Calm, Check Your Assumptions, And Carry On
Regardless of swings in global markets, those willing to maintain a thoughtful, long-term approach coupled with superior execution will be positioned for success. Peter Senst, President of CBRE Capital Markets in Canada affirms this reality, “Protect yourself from volatility. Embrace quality assets with quality rent rolls in quality locations. This is the time to make sure your balance sheet is fortified.”