What are the trends in real estate investing?
Panelists share leading trends in the industry, including the reallocation from stocks and bonds to real estate as well as the evolution of foreign investment.
Brandon Weber: One of the reasons that Hightower is where we're at is there's a mega-trend that we're seeing which is just as like great reallocation of assets out of stocks and bonds into property and we're now a global company, so we're seeing it in a lot of different markets. And so when you see like the institutional investor's portfolio now contains about 9 to 10 percent of real estate, 20 years ago is about two to three percent. PWC just put out a report, they're expecting that to go up to 15 to 16 percent of a typical institutional investor's portfolio being allocated to real estate. We're talking about trillions of dollars of capital flow being pushed into our asset class, which will be fascinating. It's resulted in much larger portfolios, bigger funds, more complexity, pan geography, pan kind of strategy owners. And then you stick on top of it the United States being kind of the last bastion of security in that global flow.
David Schwarz: There's been a real evolution in education of a lot of these foreign investors where four or five years ago when they started coming to this market, it was all about yield. They want core, they wanted the best assets and they said they wanted to buy it, New York or gateway cities at a six cap - was never going to happen. So [what] we're seeing now I think is a lot of institutional investors from internationally coming and looking for development. So a lot of these investors who say we’ll take development risk if we can be in the New York, San Francisco, DC, the big gateway cities, and actually take risk and look for more all-in return versus purely just yield as they may have been looking for a few years ago.
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