CRE Investors Start Putting Money Behind Defensive Strategies

Investors appear to be keeping the foot on the gas in terms of acquisitions. According to research firm Real Capital Analytics (RCA), investment sales volume jumped 15 percent year-over-year in 2018 to reach $562.1 billion. But some investors are clearly retooling strategies to account for slowing growth and late-cycle risks. Investors have been talking about shifting gears to “defensive strategies” for quite some time in the near record-breaking growth cycle. Those strategies are becoming more visible as even the optimists acknowledge the likelihood of slower growth ahead in the next 12 to 24 months. There is still a number of positive drivers in the economy, including GDP and job growth, but investors recognize that trees don’t grow to the sky and they have to be thoughtful about where they place their capital at this stage of the cycle, notes Steve Pumper, executive managing partner at real estate services firm Transwestern.