Many institutional investors are getting priced out of the best properties, but that might change in 2018.
It’s well-known that the extended rise of the US industrial market keeps attracting more investors into the sector. That growing popularity has put downward pressure on cap rates and pushed up prices, as well as drawn buyers into smaller, secondary markets. But behind all of the statistics, other factors are also having an influence on the direction of the market for investment.
“Many of the largest institutional investors are under allocated in this sector,” Kenneth J. Szady, national director for Marcus & Millichap | Institutional Property Advisors, tells GlobeSt.com. Pension funds, insurance companies and other significant investors have bought up many of the nation’s top office properties, some of which can soak up hundreds of millions, causing buyers to now say, “‘we’ve got to diversify.’ That’s another primary reason cap rates are so low.”
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