commercial real estate investment company, CBRE, has announced that
for the third year in a row the city of Los Angeles, CA, has ranked
as the most commercial real estate market for the entire Western
surveyed more than 300 real estate investors and gathered their
feelings about the market across North America and, in particular,
Los Angeles. The real estate investment firm asked them to rank the
cities in the U.S. in terms of desirability for commercial
to the head of CBRE's research department, Spencer Levy, the
biggest cities like Los Angeles and New York still ranked the
highest on the scale of desirability according to survey takers.
Despite this, some smaller markets showed signs of improvement.
Shekhter, Dallas, Texas, for example, came in second, even
ahead of New York. Seattle showed up in a tie with New York and San
Francisco and Houston also tied for fifth place in the survey.
These two cities were followed by Atlanta and Washington, with
Denver coming in eighth. Miami showed up ninth and then there was
another tie for tenth place with Portland, Nashville, and
As for the
reasons why these cities were ranked and why Los Angeles came in at
the top, it comes down to economic growth and tax cuts. There were
other factors, such as regulatory changes that created a more
favorable commercial real estate market overall.
Interestingly, interest rates might be higher in these cities, such
as Los Angeles, 96 percent of the investors polled indicated they
were still ready to invest in real estate in the coming year, 2018.
In fact, the study showed that 45 percent of those called wanted to
increase the real estate acquired in 2018, compared to their
investment level in 2017, Neil Shekhter notes.
surveyed also indicated they were expecting strong returns on their
investments in areas like Los Angeles and New York. Real estate
investors said they were expecting unlevered returns will range
from 6 to 9 percent. A significant percentage are anticipating
returns even higher than that in 2018, according to Neil Shekhter, founder, and CEO of Santa
this positive feeling, Levy has a cautious word for investors. In
fact, he recommends they remain agile in their investment
portfolio. In fact, Levy stated, "capital structure needs to be
agile in debt by considering longer-term paper, which is what our
Debt & Structured Finance professionals are advising today. For
equity capital structure, investors need to consider lowering their
cost of capital if they are going to stay in the same markets/asset