This article is republished with permission from TreppTalk.

A recent survey of investors conducted by CBRE indicated that a lack of liquidity in the commercial real estate (CRE) market should not be a concern. Last year, $895 billion of capital poured into commercial real estate globally. While that was down 9 percent from 2015, it was still the second-highest yearly volume for the sector since 2007, when just more than $1 trillion poured in.

This year, CBRE found that investors have earmarked $1.7 trillion for global commercial real estate. Though not all of that will be deployed, it shows that the sector will have another year with healthy liquidity. In addition to allocating capital to properties and mortgages, investors have altered their expectations and preferences.

Capital flows into any one sector depend on a variety of factors, from global and regional economic prospects to relative value. Economic growth typically indicates an increase in capital flowing into real estate, whose cash flows typically improve during periods of economic growth.

Last year’s survey found that more than one-third of investors sought commercial real estate because of the expectation that their investments would grow in value more than other assets. This year, less than 20 percent made that claim.

Investors are no longer expecting much growth in value, which is not a surprise given the high prices of real estate trades. Instead, 30 percent of respondents said they expected real estate to provide them with better ongoing yields than other asset classes.

The bulk of the $1.7 trillion of capital earmarked for global CRE is in the hands of the investment management community, which has raised billions through vehicles designed to provide both debt and equity capital for properties. Another 11 percent would come from private investors and another 11 percent from real estate investment trusts (REITs), both listed and not. Sovereign wealth funds would contribute only 1 percent of the total.

CBRE surveyed a broad range of investors globally, asking whether they would increase or decrease their exposure to commercial real estate, what types of investments they would pursue, and where they would invest. Overwhelmingly, investors said they would invest either about the same or more than they did last year. While investors had turned to core investments last year, they now say they are more inclined to pursue value-add opportunities or properties in secondary markets.

Investors are showing greater interest in putting capital to work in North America. The survey indicated that 54 percent of cross-border investors are showing a preference for North America, compared with 37 percent interest from last year’s survey. Los Angeles, Dallas, New York, and Washington, D.C., were their preferred targets. Other cities on investors’ radar include Atlanta, San Francisco, and Seattle.

Meanwhile, office is the most-favored asset class among investors, with 25 percent favoring it. Multifamily and industrial had strong showings, with more than 20 percent favoring them. Retail saw a meager 12 percent preference from investors, down from 21 percent in last year’s survey.

Though that $1.7 trillion of capital earmarked for commercial real estate this year might not be the final tally, it is encouraging to see that more and more funds are flowing into the market.

* TREPP-i Survey Loan Spreads levels are based on a survey of balance sheet lenders. For more information, visit Trepp.com.