A recent survey of commercial real estate investors ranked Phoenix as a top 10 target among Americas metros. Phoenix jumped two spots to #9 in CBRE’s 2019 Americas Investor Intentions Survey. 

The survey, which covers all asset types, found that, in 2019, more investors are prioritizing secondary markets that can offer greater potential for both equity and income growth. Investor interest in secondary assets increased for the fifth consecutive year (33%) to gain significant ground on value-add (37%) as the most preferred strategy. 

The survey also examined how investors view each of the different asset types:

• Industrial & Logistics is still the preferred property type, cited by 39 percent of investors as the most attractive for investment in 2019.

• Multifamily closely followed in second place, with 37 percent of investors naming it as the next most attractive property type—up from 20% in 2018.

• Office was cited by 10 percent of investors as the most attractive for purchase in 2019.

• Retail’s share of investors (9 percent) has held essentially steady over the past three years, despite competition from e-commerce.

“Phoenix is one of the top markets in the nation for population and employment growth, which is bolstering performance across all property types,” said Tyler Anderson, Vice Chairman, Capital Markets, CBRE. “With strong fundamentals and relatively muted new housing and apartment construction, household formation continues to outpace the supply of new single-family homes and apartments. These factors are driving investor interest in multifamily in Phoenix, which remained the preferred property type among investors in 2018. We expect multifamily to lead investment this year as well.” 

Overall, the survey shows that investors will remain active in commercial real estate markets this year, with 98% of respondents intending to make acquisitions. There has been a pronounced shift toward greater caution, with the share of investors planning to either maintain or increase spending in 2019 falling to 75% (from 88 percent in 2018).

“Continued strong real estate fundamentals, combined with historically deep debt and equity capital markets, provide good momentum for 2019. Investors are reducing risk and protecting income streams through diversification. Pricing is at or near the previous peak for most asset types in prime locations, so investors are seeking yield in secondary markets and alternative asset types,” said Chris Ludeman, Global President, Capital Markets, CBRE.