Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. REAL ESTATE
October 27, 2017 01:00 AM

Current investment cycle will be long, with soft landing – report

Arleen Jacobius
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Real estate executives polled for the Urban Land Institute's annual real estate report expect the current cycle will be longer than in the past and, unlike past cycles, will not end in a bust, according to the 39th Emerging Trends in Real Estate report released Thursday by the ULI and PricewaterhouseCoopers.

    Things are different this time around, said Mitch Roschelle, partner, PricewaterhouseCoopers, explaining the report during a session Thursday at the ULI's Fall Meeting in Los Angeles.

    This is the first time survey respondents expressed the idea that this will be a long cycle, Mr. Roschelle said. "They stopped looking at what could go wrong next year," he explained.

    The cycle could last another five years, he said.

    "The current (economic) expansion is slow by comparison (to previous ones), but it is more sustainable," Mr. Roschelle said. "We're at a point that there is nothing pushing us toward a correction."

    The report noted that with gross domestic product growth averaging just 2.1% annually, the U.S. economy "is hardly a boom" that would trigger a compensating bust. What's more, the continuation of low interest rates minimizes the risk of a major price correction and is "another soft landing vote," the report states.

    Real estate investment is becoming more transparent and more people are investing in the asset class, he said.

    "It feels like capital will continue to flow into the asset class and not flow out, which would cause a correction," Mr. Roschelle said.

    However, there are risks in the economy, the report notes.

    "The three-decade-long exacerbation of income inequality, wage stagnation and regional economic disparities threatens the breadth of the demand drivers across the economy, and for real estate as well," the report states.

    Survey respondents indicated that the most important issues for real estate are job and income growth; availability of qualified labor, including construction workers; and land and construction costs.

    "For the first five years of the recovery, it upset me that we weren't seeing faster growth. Then I thought, 'stop that'," said Mary Ludgin, director of global investment research at Heitman, Chicago, speaking on a panel discussing the latest Emerging Trends report.

    Economic cycles end because of overheating, such as wage growth of 4% or greater, Ms. Ludgin said.

    "It's not bad that the U.S. wage growth has been around 2% and up to 2.8% recently so the Fed has not had to step on the brakes," she said. "When the Fed gets it wrong, it pushes us into a recession."

    Separately, the report noted that real estate managers and other investors are investing more in smaller cities.

    Investors were "more defensive" in 2011 and invested mostly in so-called gateway cities such as San Francisco, Los Angeles and Washington.

    Since then, investors have been willing to look at smaller real estate markets, Mr. Roschelle said.

    Seattle is the top real estate market to watch for overall real estate prospects, followed by Austin, Texas; Salt Lake City; Raleigh/Durham, N.C.; and Dallas/Fort Worth, the report states. This ranking has been in a state of flux. Last year Austin was in the top spot. Dallas/Fort Worth held the No. 1 spot in the 2015 survey, which projected trends for 2016. Houston was in the top spot in the survey projecting trends for 2015, taken before the energy industry disruption; it is now number 60.

    There were about 1600 respondents to this year's survey, which was conducted this past summer.

    Related Articles
    Investors, tenants demanding that managers go green
    Average target real estate allocations surpass 10% for first time — survey
    Quest for steady income helps push worldwide assets up 8.7%
    More investors turn to farmland, debt strategies
    U.S. stocks gain on tax outlook as Treasuries drop
    U.S. stocks sink most since 2011 as rout deepens
    Recommended for You
    Money w padlock
    KKR caps withdrawals on real estate trust in latest pullback
    Christy Loop
    Blackstone's BREIT and other funds curb investor redemptions
    Harbor Group promotes managing director to CIO-multifamily
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    The Future of Infrastructure: Building a Better Tomorrow
    Fulcrum Issues: Equity Returns and Inflation — Choose Your Own Adventure
    What Matters Most in Considering a Private Debt Strategy
    Why pursue direct lending in the core middle market?
    Research for Institutional Money Management
    Are Factors a Thing of the Past?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing