Highlights from A Guide to Commercial Real Estate Investment in 2022

Article originally posted on HERE on November 24, 2021

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This forum explored some of the strategies for investing in commercial real estate during a time of innovation.

A diverse set of sessions covered themes including how climate change is affecting investment decisions, the return of core real estate, tips for navigating a market where returns are tight and highlights from recent research on investor expectations as part of WMRE’s second virtual forum in 2021.

A Guide to Commercial Real Estate Investment in 2022 took place last week. All four sessions are available for on-demand viewing by registering here. The forum was a follow-up to CRE 2021: Transitioning to Recovery, which took place in August. (Those sessions are also available on demand by registering here.)

This forum explored some of the strategies for investing in commercial real estate during a time of innovation. Investors have access to commercial real estate on the public and private sides and can pick from traditional property types (office, retail, multifamily, industrial) as well as existing and emerging alternatives (hotel, seniors housing, student housing, data centers and more).

The sessions included:

What the Modern Real Estate Investor Really Wants

AppFolio Investment Management surveyed over 100 real estate investors to gain insights into the relationships they have with their management companies, their goals, and their concerns about the industry. The company compiled those findings into a comprehensive report that Greg Boyleston, senior product manager for Appfolio Investment Management, explored during the session.

Ali Zaidi, head of real assets at LSEG, and Calvin Schnure, senior vice president of research and economic analysis for Nareit, discussed how listed real estate securities represent a substantial portion of an investment opportunity set. The characteristic features of real estate as an asset class–an often relatively predictable income stream and the frequent inflation-linking of rents, offering the prospect of long-term real returns, together with a relatively uncorrelated return stream by comparison with other equity market sectors–make this category of investment a natural consideration for investors looking to diversify portfolios with long-term savings goals.

Climate Risk in CRE: How CRE Professionals Can Measure & Manage the Impacts of Climate Change

Growing risks from climate change, such as wildfires, floods, and other hazards, are demanding that professionals in commercial real estate change their decision-making processes both from an economic modeling perspective and a functional one.

In this roundtable of Moody’s experts, Victor Calanog, head of CRE economics, Natalie Ambrosio Preudhomme, director of ESG solutions, and Eric Bao, director of quantitative research, had a conversation covering:

  • The science behind climate risk data, and how experts are distilling that information into actionable, useful insights for CRE professionals.
  • How economists are integrating climate risk data into their forecasting models, and what the implications are for performance fundamentals.
  • How investors, lenders, and brokers can functionally integrate this data into their decision-making.
  • How climate risk scores may impact credit risk decisions and processes.

What to Expect in a World of 3 Percent Cap Rates and Reduced Returns

Larry Jacobson, CEO of The Jacobson Company, a multi-generation private equity real estate company based in Southern California, talked about how to navigate a world of ever-increasing prices and downward pressure on returns. He outlined how investors must remain vigilant of where they place their capital to ensure their hunt for yield is tempered by a prudent regard for wealth preservation.

Appfolio was the forum’s Platinum Sponsor. Moody’s Analytics, The Jacobson Company and FTSE Russell were Gold Sponsors.

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