The DLA Piper annual survey of real estate executives cites the availability of capital looking to invest in commercial real estate as a reason for optimism in the current environment.
Speaking on the REIT Report, John Sullivan, U.S. chair and global co-chair of DLA Piper’s real estate practice, said “the fact that there are folks out there with money to invest—and actually we’re seeing some increases now in investment—is a reason for some optimism.”
The survey showed 58% of respondents citing an abundance of available investment capital as the top reason for an optimistic economic outlook, an increase of 15 percentage points from the 2019 survey. Sullivan pointed to recent estimates of around $400 billion in available institutional capital looking to invest in commercial real estate.
The 2020 survey, conducted between August to September, also showed that 51% of respondents predict it will be 18-24 months before U.S. GDP gets back to pre-pandemic levels. “While 18-24 months is not an insignificant pain period, it’s actually not that pessimistic a prediction,” Sullivan said.
Sullivan also noted that commercial real estate fundamentals “remain good,” although “what worries people is the uncertainty about how the pandemic will play out.”