Investing in commercial real estate can seem like a big decision, fraught with difficult questions. “Should I invest in property,” potential investors wonder, “or should I wait for further market recovery?” But according to a recent study, there may be no better time than the present: the United States has reportedly overtaken China as the world’s largest real estate market.
On Wednesday, March 11, the World Property Journal reported that the property investment firm Cushman and Wakefield had announced that the U.S. had overtaken China as the world’s foremost real estate market. According to the firm’s annual global market report, the U.S. currently boasts better relative economic growth, quantitative easing and low interest rates, all of which appeal to investors asking “should I invest in property?” Additionally, cities in the U.S. and Canada are leading in areas like technology, sustainability and demographic change. In contrast, the 6.3% decrease in global real estate investment was contributed wholly to a drop in land purchases in China.
Experts at Cushman and Wakefield stated that this recent prosperity was due to the Fed’s stimulus, which took longer to affect leasing markets than it did investment and finance. Now, however, a tightening supply, growth pressures and new development opportunities are causing the real estate market to rise. Global statistics support this assertion: while the Americas as a whole demonstrated a strong performance in 2014, meeting historic lows in many areas and reaching 71% of the peak values reached in 2007, North America has demonstrated particular success. However, thanks to the positive trends already in place, the U.S. is expected to take the lead in 2015 as well, with compression and rental values spurring further economic opportunity.
With these promising conditions, many investors will likely move from wondering “should I invest in property?” to researching how to invest in a REIT. But despite the promising conditions, many investors will likely benefit from working with real estate partners, groups of investment professionals with experience in the property market. These partners make group investment decisions that can lead to real estate success for all involved. If you are interested in investing in real estate, contact one of these enterprises today.