Survey: Real Estate Executives Less Confident in Health of Market

Jay Epstien

In the the latest episode of The REIT Report: NAREIT's Weekly Podcast, Jay Epstien, co-chair of law firm DLA Piper’s Global Real Estate practice, discussed the results of the firm’s recent survey of real estate executives.

Epstien said the results of the survey showed that while industry executives remain optimistic about the health of the real estate market, their enthusiasm is starting to wane.

"People are confident and comfortable that the market is in good shape, but less optimism than there was 18 to 24 months ago when the markets were chugging along at a high velocity," he said. 

Epstien noted that to start 2016, the volume of transactions in the marketplace has dropped off from the year-earlier period. He also pointed out that projections of the size of commercial mortgage-backed securities issuance have fallen as well.

"All of that brings the cautious optimism tenor into the marketplace," Epstien said. "At the same time, everybody appears relatively confident that capital flows continue very strong and that fundamentals are solid."

Changes in demographics and changes in health care coverage continue to drive interest in health care real estate, according to Epstien. Another popular segment of the real estate market is multifamily due to the ongoing flow of residents back into urban markets.

"There is room to run, but we heard some caution in various markets," said Epstien, referring to sentiment regarding the apartment sector.

Looking abroad, the DLA Piper survey revealed that the United Kingdom and Germany are the two most popular international investment targets. Epstien said investors appear to be taking comfort in the safety of the two developed markets. Meanwhile, concerns about the slowing of China's economy have led to skittishness about the health of real estate in the Far East.

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