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Despite COVID-19, Global Institutions Continue to Increase Allocations to Real Estate, Finds Hodes Weill & Associates and Cornell University
December 10, 2020 GMT
NEW YORK--(BUSINESS WIRE)--Dec 10, 2020--
Uncertainties related to COVID-19 have not dampened global institutions’ confidence in commercial real estate. In fact, investor sentiment increased for the third straight year, reaching a seven-year high in 2020, according to Hodes Weill & Associates and Cornell University’s Baker Program in Real Estate’s eighth annual Institutional Real Estate Allocations Monitor.
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The “Conviction Index” in this year’s survey, which measures institutions’ view of real estate as an investment opportunity from a risk-return standpoint, increased from 5.7 to 5.9. The steady growth in confidence in the asset class reflects the strong returns investors have realized over the last five years, which were particularly attractive in a yield-starved environment. Though actual investment returns declined 30 basis points to 8.5% in 2019, results continue to outpace average target returns of 8.3%.