Highlights from A Guide to Commercial Real Estate Investment in 2022

Beth McCandry

As part of WMRE’s second virtual forum in 2021, various sessions covered topics such as the impact of climate change on investment decisions, the return on core properties, tips for navigating a market with tight returns and highlights from recent research on investor expectations.

A guide to commercial real estate investing in 2022 was held last week. All four sessions are available for viewing on demand by registering here. The forum was a continuation of CRE 2021: Transitioning to Recovery, which took place in August. (These sessions are also available upon request by logging in here.)

This forum examined some of the strategies for investing in commercial real estate in an era of innovation. Investors have access to commercial real estate on the public and private side and can choose from traditional property types (office, retail, apartment buildings, industrial) as well as existing and emerging alternatives (hotel, senior housing, student housing, data centers and more). .

The sessions included:

What the modern real estate investor really wants

AppFolio Investment Management surveyed over 100 real estate investors for insights into their relationships with their management companies, their goals, and their industry concerns. The company compiled these findings in a comprehensive report that Greg Boyleston, Senior Product Manager at Appfolio Investment Management, examined during the meeting.

Return of the core

Ali Zaidi, Head of Real Assets at LSEG, and Calvin Schnure, Senior Vice President Research and Economic Analysis at Nareit, discussed how listed real estate stocks represent an essential part of investment opportunities. The hallmarks of the real estate asset class – an often relatively predictable stream of income and the frequent peg to inflation in rents, which offers the prospect of long-term real returns, along with a relatively uncorrelated stream of returns compared to other stock market sectors – make this asset class a natural consideration for investors who want to diversify their portfolio with long-term savings goals.

Climate Risk in Commercial Real Estate: How Commercial Real Estate Experts Can Measure and Manage the Effects of Climate Change

Growing risks from climate change such as forest fires, floods and other dangers require professionals in commercial real estate to change their decision-making processes from both an economic and a functional point of view.

In this roundtable of Moody’s experts, Victor Calanog, Head of Commercial Real Estate, Natalie Ambrosio Preudhomme, Director of ESG Solutions, and Eric Bao, Director of Quantitative Research, talked about:

  • The science behind climate risk data and how experts turn that information into actionable, useful insights for commercial real estate professionals.
  • How economists integrate climate risk data into their forecasting models and what effects this has on the performance fundamentals.
  • How investors, lenders and brokers can functionally integrate this data into their decision-making.
  • How climate risk assessments can influence credit risk decisions and processes.

What to expect in a world with 3 percent cap rates and reduced returns

Larry Jacobson, CEO of The Jacobson Company, a multigenerational private equity real estate company based in Southern California, talked about how to navigate a world of rising prices and declining return pressures. He outlined how investors need to be careful about where they’re placing their capital to ensure that their chase for return is dampened by prudent consideration for wealth preservation.

Appfolio was a platinum sponsor of the forum. Moody’s Analytics, The Jacobson Company, and FTSE Russell were Gold Sponsors.