Multifamily Most Favored Property Type

Multifamily assets should offer the most favorable investment opportunity this year, followed by industrial properties, said Deloitte and Situs RERC.

The firms surveyed nearly 4,000 people who attended their recent webcast. Just over one-third of respondents said they believe multifamily assets would offer the most favorable investment opportunity in 2019. 

But this represented a downward trend for the multifamily sector, the report said, noting 37 percent of those surveyed ranked multifamily first last year and 46.8 percent did so in 2017.  Multifamily has ranked highest among all the property types since the poll began in 2011, the report said. Just under 30 percent said they favored the sector in 2011.

The industrial sector ranked second, deemed most favorable by 18.2 percent of respondents, the report said. Though it slipped from 20.4 percent last year, the sector ranked significantly higher than in 2017, when only 14 percent of respondents favored it. “The sector’s popularity has been increasing steadily since 2012, except for a dip in 2016 and this year,” the report said. After ranking third from 2011 through 2016, it moved ahead of the office sector into the second position in 2017 and has remained there since.

The office sector’s favorability has remained between 11 percent and 16 percent since 2012, and it stayed there again this year at 13.3 percent, down from 14.0 percent in 2018 but up from its 2017 low point of 11.5 percent. The sector peaked at 17.5 percent in 2011, the report said.

The retail sector improved its rating slightly, moving from 7.1 percent in 2018 to 7.6 percent in 2019. “Dating back to 2011, the retail sector has ranked as the second-least favorable sector,” the report said. “The percentage of respondents favorable generally fell every year from 2011 through 2014, rose in 2015 and dropped again in 2016 and 2017 before starting to creep back up.”

Hotels once again ranked as the least favorable investment opportunity, the report said. Only 5.3 percent of respondents said they prefer the asset class to other property types. The hotel sector has remained the least-favorable sector every year since 2011, the report said. But the sector’s current rating represented an increase from its 4.0 percent score last year.