Photo courtesy of CBRE

Investors are poised to purchase more U.S. commercial real estate in 2024, as they anticipate improved credit conditions as interest rates fall later this year, according to the findings of CBRE’s latest U.S. Investor Intentions Survey.

The survey, which covers all asset types, reveals notably improved investor sentiment, with 60 percent planning to expand their real estate portfolios in 2024 versus just 16 percent in the previous year.

Among investor types, developers, private equity funds, real estate funds and REITs are expected to be particularly active, with a higher percentage planning to acquire more assets compared to other investor categories.

Despite lower property values, 40 percent of all investors anticipate selling more assets in 2024, compared with only 14 percent in the previous year’s survey.

“While credit conditions remain challenging, investors are looking beyond the current difficulties. We expect investment activity to gain momentum in the second half of the year as financial conditions improve,” CBRE Global President of Capital Markets Chris Ludeman said in a statement. “Investors are particularly focused on opportunistic and core-plus strategies as they seek higher risk-adjusted yields.”

Investors continue to favor large Sun Belt cities and high-performing secondary markets for their property investments in 2024. Dallas retains its position as the most preferred market for the third consecutive year, followed by Miami, Raleigh, Atlanta, Nashville and Charlotte. Additionally, major gateway markets such as Boston, New York City and Washington, D.C., are also recognized as top markets for property returns.

The multifamily and industrial/logistics sectors remain the most sought-after asset classes in 2024. Multifamily investors favor class A properties, while industrial & logistics investors show a preference for class A facilities in major markets. Retail investors highly favor grocery-anchored centers, while prime/trophy office properties are the top choice for office investors.

Although pricing discounts are expected across all sectors, the survey highlights that investors expect value-add office assets and shopping malls will offer the most significant discounts. Pricing discounts for multifamily and industrial & logistics assets are expected to be less than 10 percent, while grocery-anchored retail centers are expected to have the smallest discounts.