Investment in CRE expected to grow 25% worldwide in 2011: Jones Lang LaSalle
Investment activity in commercial real estate worldwide is expected to grow substantially this year, driven by increased confidence in the marketplace. Global investment volume will jump 20% to 25% in 2011 to more than $380 billion, according to a report by Jones Lang LaSalle (JLL) released Wednesday. In 2010, volume increased 50% from the year prior, up to $319 billion. "'Resurgence' is the watchword for 2011 with the market anticipating the strongest real estate trading and performance year since 2007," the financial services firm said. Jones Lang LaSalle said in 2010, fourth quarter investment volume exceeded $100 billion for the first time since the financial crisis began. In 2010, the U.S. recorded a sharp increase in investment activity with several deals closing near the year's end. The annual volume of CRE investment hit $80 billion, up 143% from $37 billion in 2009. Jones Lang LaSalle attributed the uptick to increased acquisition activity by investors, particularly public and private real estate investment trusts, once they felt confident in the economic recovery and debt market liquidity. Overall, the firm anticipates seeing investors target more properties with a "value-add" component, a geographic expansion in investment activity, an acceleration in the pace of assets coming to market, larger CRE sales volume as banks look to reduce their exposure to real estate and a decline in liquidation timelines. "Global investors, who are armed with ample equity and a low cost of debt capital, are in many cases still frustrated by a relatively small supply of available core product," Jones Lang LaSalle commented. "However, strengthening economic and property market recoveries will encourage them to broaden their search." Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR. The author holds no relevant investments.