The Americas Survey Results | November 2021 - Colliers Global Capital Markets 2022 Investor Outlook
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The Americas
Survey Results | November 2021
Colliers Global Capital Markets 2022 Investor Outlook
The Americas Survey Results
Global Capital Markets 2022 Investor Outlook
What’s inside?
01 03 04 05 12
Key Findings Asset Type Asset Type Asset Classes Capital Flows
& Capital Values & Risk Profiles • Industrial & Logistics
• Multifamily / BTR
• Office
• Retail
• Hotels
• Specialized (Alternative)
13 17 19 20
Challenges & Environmental, Summary Contact Us
Opportunities Social & Corporate
• Macro Factors Breakdown Governance (ESG)
• Market Factors Breakdown
KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 1
The Americas Key Findings
Another record year of investment is expected
in the Americas during 2022
87% of investors are optimistic
about the economic outlook
Industrial core values Retail, hotel core values Office core values to range
Inflation is a mixed bag, with to increase by 10%+ to be flat to negative from -10% to 10%+
40% of investors seeing both
positive and negative impacts
ESG: 64% of respondents have
Multifamily / BTR values Life sciences / lab Specialized housing
either already assessed or are Dallas, Texas, U.S. is the #1 to increase by 10%+ is the top specialized will be popular in 2022
currently establishing benchmarks location to invest during 2022 target in 2022
The top three 1 2 3 The top three
sectors investors are 67% 53% 45% challenges
most likely to invest in facing investors
during 2022 Rising Government Policies COVID-19 / during 2022
Industrial Multifamily Office Construction Costs & Regulations Return to Workplace
& Logistics / BTR Uncertainty
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey Results
KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 2 “Investors are optimistic about today’s market liquidity, with many commenting on the incredible levels currently available. After a record-setting 2021, 2022 is lining up to be even stronger.” David Amsterdam, President, U.S. Capital Markets & Northeast Region
KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 3
Asset Type & Capital Values
What do you think will be the % 35%
30%
change in capital values per asset 25%
type, for the Americas region in 2022? 20%
15%
Investors are becoming more optimistic about office investment.
10%
Sixty-percent of respondents believe values will range from -10% to
10%+. There is little expectation for a rapid rise in core values. Industrial 5%
investors remain enthusiastic about the prospects of the asset class, as 0%
62% of respondents expect additional value gains in 2022. More than one- 20%+ +10 to 20% 0 to +10% No change 0 to -10% -10 to -20% -20% +
third expect gains of 10% or more. Multifamily investors believe the run of
Office Industrial & Logistics Multifamily / BTR Retail Hotel
value appreciation isn’t over yet. In fact, 55% of both core and value-add Core, Core-Plus Core, Core-Plus Core, Core-Plus Core, Core-Plus Core, Core-Plus
investors are expecting value growth in 2022. Retail and hotel investors Office Industrial & Logistics Multifamily / BTR Retail Hotel
Value-Add Value-Add Value-Add Value-Add Value-Add
are more pessimistic. A majority of respondents anticipate no value
appreciation or losses in retail. Hotel investors see more opportunity. Note: Remaining %’s refer to Investors surveyed who were unable to provide an answer
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey Results
KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 4
Asset Type & Risk Profiles
IC E
F F
O
I
N
DU
ST
RIA
ZED
L &
S P E C I A LI
Which of the following asset classes and risk profiles are
LOGISTICS
you considering investing in during 2022, in the Americas?
HOTE L
Our survey indicates that a shift in capital flows is unlikely. Industrial will multifamily, a positive sign for added liquidity. Specialized assets,
reign supreme in 2022, holding onto its spot as the top-rated asset type. retail, and hotel round out this year’s list of popular investments.
Industrial was the clear-cut favorite going into 2021, and investment
RE
Value-add strategies were the most sought-after across asset
volumes and price growth followed suit. Multifamily ranks second in our
TA
L
I
classes, suggesting investors will continue moving out along the
survey, boosted by record-high rent growth and sales volume, as well as
risk spectrum. In addition, record pricing has led to an explosion of
favorable demographic trends. Office assets, in third place, are gaining / BTR
interest in development, with investors focused on industrial, M U LT I FA M I LY
momentum with investors, breathing new life into this space. Notably,
multifamily, and specialized assets.
our survey suggests that investor interest in office is nearly on par with
67% Industrial & Logistics 53% Multifamily / BTR 45% Office 18% Retail 15% Hotel 19% Specialized (Alternative)
Core 59% Core 51% Core 46% Core 38% Core 28% Core 29%
Core-Plus 59% Core-Plus 51% Core-Plus 45% Core-Plus 33% Core-Plus 28% Core-Plus 29%
Value-Add 59% Value-Add 58% Value-Add 54% Value-Add 48% Value-Add 50% Value-Add 43%
Opportunistic 30% Opportunistic 28% Opportunistic 32% Opportunistic 33% Opportunistic 39% Opportunistic 29%
Development 57% Development 47% Development 29% Development 10% Development 22% Development 43%
Debt 22% Debt 23% Debt 21% Debt 33% Debt 33% Debt 33%
0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80%
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey Results
KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 5
Asset Classes
Industrial & Logistics
67% of investors want to invest in this sector
Which types of industrial 83% 81%
& logistics assets do you
intend to invest in during
48%
2022, in the Americas? 44%
35%
Regardless of strategy and asset focus, industrial investors 21%
have a strong desire to add to their portfolios. We don’t
expect liquidity to be a problem. Light industrial/flex and
2%
big-box/warehouse are popular among those surveyed, with
more than 80% interested in those asset types. Specialty
assets are also in favor, with respondents showing interest
Light Industrial Big-Box / Last-Mile Industrial Park / Cold / Dark Container Terminal Other
in container terminals (21%) and cold/dark storage (35%). / Flex Warehouse Distribution Manufacturing Storage (Truck Park)
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey Results
KEY FINDINGS CAPITAL VALUES RISK PROFILES A S S ET C L A S S ES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 6
Asset Classes
Multifamily / BTR
53% of investors want to invest in this sector
Which of the following risk
profiles are you considering for
multifamily / BTR assets in the 58%
51%
Americas during 2022?
51%
47%
Multifamily assets remain a must-have for investors, thanks to booming 28%
sales that show no signs of slowing down. Cap rate compression is 23%
causing capital to fan out into secondary and tertiary markets and into
specialized forms of housing. Looking to capture upside, investors will
target value-add deals in 2022. Development is proving enticing to the
marketplace and will be targeted at a rate similar to core and core-plus.
Investors clearly see value in ground-up development. Value-Add Core Core-Plus Development Opportunistic Debt
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey Results
KEY FINDINGS CAPITAL VALUES RISK PROFILES A S S ET C L A S S ES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 7
Asset Classes
Office
45% of investors want to invest in this sector
Which of the following risk
profiles are you considering
for office assets in the 54%
Americas during 2022? 46% 45%
32%
29%
Office is back on the table for investors in 2022. Office sales have
21%
shown clear signs of recovery thanks to multi-property trades and
investors being willing to take on more leasing risk. The most in
demand markets are major urban centers such as New York, Boston,
San Francisco, and Toronto. Value-add is the most popular strategy,
which further supports a continued rebound for sales volume.
Value-Add Core Core-Plus Opportunistic Development Debt
The uncertainty of return to office remains a headwind.
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey Results
KEY FINDINGS CAPITAL VALUES RISK PROFILES A S S ET C L A S S ES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 8
Asset Classes
Retail
18% of investors want to invest in this sector
Which types of retail assets
do you intend to invest in 65%
during 2022, in the Americas?
50%
35% 35%
25%
Grocery-anchored centers are on track to be the most popular retail
assets in 2022. These centers have dominated sales statistics for
several quarters, and that trend seems to be holding steady, with
nearly two-thirds of all respondents choosing this investment target.
Interest is mounting for urban retail. On the flip side, malls remain
Grocery / Supermarkets CBD / High Retail Park / Reposition / Out of Town Shopping
the least targeted, with 25% of respondents expressing interest. / Convenience Street Retail Power Center Change of Use Centers / Malls
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES A S S ET C L A S S ES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 9
Asset Classes
Hotels
15% of investors want to invest in this sector
Which types of hotels
Mid-Scale Properties
Resort only 27% Leased only 0%
City only 45% Managed only 45%
do you intend to
Both 27% Both 55%
By Location By Contract
invest in during 2022, Luxury Properties
Resort only 18% Leased only 9%
in the Americas?
City only 45% Managed only 27%
Both 36% Both 64%
By Location By Contract
33% 33% Limited-Service Properties
Hotel investors are most interested in mid-scale Resort only 0% Leased only 0%
21% City only 43% Managed only 43%
and luxury properties, with each property type Both 57% Both 57%
12%
receiving 33% of responses. Properties in both By Location By Contract
resort destinations and cities are popular targets.
Reposition / Change of Use
Leased versus managed assets aren’t looking like a Resort only 0% Leased only 0%
dealbreaker, though our survey participants were City only
Both
25% Managed only
Both
50%
75% 50%
Mid-Scale Luxury Limited-Service Reposition /
more likely to select managed assets. Properties Properties Properties Change of Use By Location By Contract
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES A S S ET C L A S S ES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 10
Asset Classes
Specialized (Alternative)
19% of investors want to invest in this sector
Which types of specialized
15%
(alternative) assets do you 14%
13%
12% 12%
plan on investing in during 10%
8%
2022, in the Americas? 6%
5%
4%
Life science/lab was the top specialized asset in our survey, 0%
followed by data centers. Housing was close behind, with
affordable/social housing, student housing, and single-family
ab rs ing ge ing t al in g re ia l e
ar cy) on
rental ranking among the most popular choices in this category. /L nt
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Primary and secondary healthcare and education-focused cie D cia S en -F am em ryH
(
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o
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ir da -Se ar octor
Lif le S g R n to im
investments were the least popular among respondents. ab Sin /
ec
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rd s ing S B u i
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Aff H
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Se
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 11
Dallas is the top overall investment destination
for 2022, after leading the U.S. in investment
sales volume in 2020 and 2021.
Investment continues chasing Sunbelt markets, with no signs of slowing down.
Interest in gateway markets is gaining traction and could indicate a slight change
in capital flows. New York, Los Angeles, Boston, and San Francisco
rounded out the top investment markets.KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 12
Americas Capital Flows 67%
Industrial &
53%
Multifamily /
45%
Office
19%
Specialized
18%
Retail
15%
Hotel
Logistics BTR (Alternative)
Which locations by asset type 1 Industrial & 2
Multifamily / BTR
do you intend to invest in during Logistics
New York 25%
2022, in the Americas? Dallas 33%
Dallas 24%
Los Angeles 30%
Los Angeles 24%
Investors are excited for industrial properties, with Dallas industrial the most New York 26%
commonly selected option followed by Los Angeles. New York, which also ranked
highly on the industrial front, is the top office choice in the Americas. Boston
and Washington, D.C. were next. New York was the top choice for multifamily
investment, with Dallas and Los Angeles tied for second. Los Angeles led hotel, 3 4 Specialized
Office
while Washington, D.C. came out on top for retail. Boston and Los Angeles were (Alternative)
the top specialized markets, thanks to their strength in life science (Boston) and New York 28%
Los Angeles 9%
entertainment (Los Angeles). Numerous respondents also indicated their interest Boston 20%
in Seattle, Denver, and Portland. Toronto was the top choice in Canada across Boston 9%
Washington, D.C. 19%
office, industrial, and multifamily, and led the pack in hotel. Retail investors picked Dallas 6%
Vancouver and Montreal as the most desirable cities in Canada. We expect appetite
for investment in Mexico and South America to remain restrained in 2022. Note: The % numbers show the proportion of survey respondents who expressed a preference
for the above asset classes across the 15 Americas locations in our survey.
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 13
Challenges & Opportunities 26%
29%
41% Macro Market 44%
Please rank the following factors in terms of their influence on your Factors Factors
ability to pursue your investment strategy in the Americas during 2022:
33% 27%
Positive Impact No Impact Negative Impact
Overall Sentiment
Survey respondents viewed macro factors as a general hindrance to investment Market factors, on the other hand, were seen as generally positive. Only 29% see market factors
pursuits. Only 26% feel overall macro factors will have a positive impact. Investors as a negative. Respondents were positive about today’s market liquidity, with many commenting
remain concerned about government policy and regulation, such as tax changes. on the incredible levels currently available. With 2021 shaping up to be a record-setter for
That was the single biggest challenge they saw on the negative/downside. COVID-19 investment sales activity, 2022 is lining up to beat it. Investors are also seeing positive impacts
and the return to workplace uncertainty was second, echoing the sentiment from our from rent growth and the availability of debt. The majority of respondents believe that the cost of
previous survey. Third, investors are not sure what to make of inflation. Roughly 40% debt will be a positive, or won’t have an impact, while 41% see it as a negative. Overall, investors
of respondents thought inflation would have a positive impact, while another 40% are most concerned about rising construction costs. Tenant solvency was a mixed bag, with
thought the opposite. The remaining 20% thought it would have no impact. Finally, roughly equal selections on the positive and negative sides. We saw similar results with product
survey-goers were optimistic about the economic outlook, with a full 87% seeing availability. Asset sustainability skewed to no impact, with 47% choosing that option. That said,
economic activity as having a positive effect. This was the single-most selected option 38% see it as a positive.
across the board.
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 14
26%
41% Macro
Factors
Macro Factors Breakdown
Please rank the following factors in terms of their influence on your
ability to pursue your investment strategy in the Americas during 2022
33%
87%
80%
70% 62% 63%
58%
60%
47%
50% 43% 43%
37%
40% 33% 34% 33%
30%
20%
20%
8% 9% 8%
10% 5% 5% 4%
0%
Rising Inflation Currency Fluctuation Economic Growth Travel Restrictions COVID-19 / Return to Office Government Policies &
Uncertainty Regulations
Rising Currency Economic Travel COVID-19 Government Policies
Inflation Fluctuation Growth Restrictions Return to Workplace Uncertainty & Regulations
Positive Impact No Impact Negative Impact
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 15
Market Factors Breakdown
29%
44%
Market
Factors
Please rank the following factors in terms of their influence on your
ability to pursue your investment strategy in the Americas during 2022
27%
80% 72% 72% 74%
70% 62%
60%
47%
50% 42%
39% 41%
38%
40% 36%
32% 33%
30% 25% 26% 26%
24%
17% 16% 16%
20% 12%
14% 14%
11% 11%
10%
0%
Market liquidity Availability of product Tenant solvency Rental growth Availability of debt Cost of debt Asset sustainability Rising construction
compliance costs
Market Availability Tenant Rental Availability Cost Asset Sustainability Rising
Liquidity of Product Solvency Growth of Debt of Debt Compliance Construction
Costs
Positive Impact No Impact Negative Impact
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 16 “ESG considerations are gaining traction in the Americas. Confusion on guidelines and benchmarks needs to be overcome.” Emeka Mayes, Partner, Head of Capital Markets Brokerage, Canada
KEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 17
Environmental, Social &
Corporate Governance (ESG)
Investors in the Americas are playing catch-up on ESG- are beginning to take measurements on this topic. An
specific capital deployment. Environmental factors are additional 35% are only considering it at this point. A
now playing a part in the majority of asset performance minority, 17%, always consider certifications to benchmark
reviews. More than one-third of respondents are currently assets.
integrating new protocols and performance benchmarks.
Nearly an additional one-third have already assessed their Governance has made the most progress. Nearly half of
assets’ energy efficiency and emissions performance. investors have ESG governance benchmarks, disclosures,
Finally, one-fifth are considering an assessment but have and reporting in place. There’s room for growth here, as
yet to integrate this into their business operations. 43% are considering adopting standards to drive their ESG
governance but haven’t decided yet. Nearly one out of 10
Social factors, such as the health and wellness of feel these benchmarks aren’t applicable.
assets, are further behind. Nearly 40% of respondents
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 18
Environmental Factors Social Factors Governance
Are you taking action on the To what degree does the health and How well established is the Governance in
environmental performance of your assets? wellness profile of your assets factor your company, to manage and integrate
into investment decisions? E&S factors into your overall strategy?
A capital improvement, disposal and
acquisition strategy is in place to meet
environmental asset performance targets
We always consider certifications such as WELL ESG Governance benchmarks,
10% or Fitwell to benchmark and manage our assets disclosure and reporting in place
All assets have been assessed in terms of their 17% 48%
energy efficiency and emissions performance
We are beginning to make Only a consideration, yet to decide on benchmarks
30% measurements on this topic to adopt to drive our ESG Governance
Currently being integrated, with new protocols 38% 43%
& performance benchmarks established
Only a consideration, yet to be Not applicable
34% integrated into investment decisions
9%
Only a consideration, yet to be 35%
integrated into business operations 0 5 10 15 20 25 30 35 40 45 50
Not applicable
21%
10% Percentage (%)
Not applicable
4% 0 5 10 15 20 25 30 35 40 45 50
Percentage (%)
0 5 10 15 20 25 30 35 40 45 50
Percentage (%)
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 19
The Americas Summary
Fresh off a record-setting 2021, investment volumes will continue riding the momentum wave into 2022.
Investors are highly complementary of the liquidity in the market today, with debt and equity widely available.
Investors are also moving out along the risk spectrum, with value-add plays becoming more commonplace.
Sunbelt markets remain highly popular investment targets, with Dallas leading the way in the Americas.
Gateway cities are also on investors’ radars, suggesting a shift in capital flows could be on the way. “Economic conditions
Economic conditions appear favorable, further boosting investor optimism, but inflation is a wildcard. appear favorable,
Some investors consider this a positive since capital chases tangible assets, but others view it negatively.
Construction costs are also on the minds of investors, as is government policy. further boosting investor
Industrial and multifamily assets continue to be investor favorites, setting these property types up for another optimism, but inflation
successful year. Office is also picking up steam. Retail and hotel continue to lag, but we expect increased
opportunity in this space as economic growth improves. Life science/lab holds on to their spot as the top is a wildcard.”
specialized assets for the second year in a row, with investors also homing in on data centers and self-storage.
Other popular targets include affordable, student, single-family rental, and senior housing. Finally, capital will
chase demographics, allowing for investment in a wide variety of asset types and locations.
Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 20
Questions?
Please contact us.
David Amsterdam Aaron Jodka Emeka Mayes Leo Lee
President | U.S. Capital Markets Director of Research | Partner, Head of Capital Markets, Director,
and Northeast Region U.S. Capital Markets Brokerage | Canada National Research Operations | Canada
+1 212 716 3556 +1 617 330 8059 +1 514 764 2822 +1 416 620 2839
david.amsterdam@colliers.com aaron.jodka@colliers.com emeka.mayes@colliers.com leo.lee@colliers.com
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Colliers Global Capital Markets 2022 Investor Outlook | The Americas Survey ResultsKEY FINDINGS CAPITAL VALUES RISK PROFILES ASSET CLASSES CAPITAL FLOWS CHALLENGES & OPPORTUNITIES ESG SUMMARY CONTACT 21
The Americas
2022 Investor Sentiment Survey Results
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