Capital Markets

Should Cap Rate Spreads (and Cap Rates) Be This High?

Interest rates have been on a roller-coaster ride over the last year, but cap rates are largely unchanged. The result of these moves is that cap rate spreads relative to the safe investments in the 10-year U.S. Treasury bonds have moved back to the levels seen in 2017. Given everything that has changed over the last year—as well as everything that has not—there may be room for cap rate spreads to move lower.

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How Brexit and the Market Cycle Are Affecting Investor Sentiment across the United Kingdom

At the 2019 ULI U.K. National Conference, a panel on the practicalities of real estate investment reflected on the opportunities and challenges, not least in terms of the impact that Brexit is having on investor sentiment, as well as where we are in the market cycle. Multifamily continues to do well, while retail is struggling as in overbuilt markets.

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Looking Both Forward and Backward at China’s Economic Evolution

Pragmatism and caution have defined China’s 40 years of economic reform, and this steady progress is set to continue, said Shui On Group chairman Vincent Lo speaking at the 2019 ULI Asia Pacific Summit. Lo—who has been investing in China real estate for more than 30 years—said that the nation’s approach can be summed up by the aphorism “cross the river by feeling the stones.”

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Prospects for Japan’s Capital and Real Estate Markets

Asset prices in Japan have risen strongly in recent years, fueled by influences including cheap and abundant capital, positive yield spreads, slow but steady economic growth, and a resurgent tourism sector that has proved to be a boon for local retailers. And, not least, positive sentiment around the 2020 Summer Olympics has been a factor, with many investors believing the market will remain buoyant until after the Games are finished. Recently, however, perceptions have shifted, with a growing body of opinion gravitating towards the view that a correction may occur well before summer 2020.

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Recent Articles

  • Global Real Estate Investors See Slowing Growth in U.S. and Europe, Increased Interest in Asia

    May 28, 2019

    ULI research highlights continued demand for property as investors try to balance their appetite for yield amid potential market risks.

  • ULI Real Estate Economic Forecast Sees More Runway Ahead for Current Growth Cycle

    May 2, 2019

    The U.S. economy is weeks away from celebrating the start of its record-breaking 11th year of economic expansion, and the latest ULI Real Estate Economic Forecast is pointing to an even longer run that could extend through 2021, as discussed on a webinar hosted by ULI.

  • Finding a Funding Solution to Maintain Detroit’s Parks

    ULI Advisory Services convened a panel of land-use experts in early April to brainstorm ideas on how to improve funding for long-term maintenance and sustainability of Detroit’s parks.

  • Real Estate Economists Forecast Slower Growth and Returns in 2021

    April 26, 2019

    Despite stock and bond market volatility in late 2018 and increasing global trade and growth concerns, the April 2019 “ULI Real Estate Economic Forecast” was surprisingly consistent with the previous forecast, released in October 2018. Overall, expectations for 2019 and 2020 are flat to up, while the newly introduced forecast for 2021 calls for slower growth and returns. Moderating growth in gross domestic product (GDP) and jobs for 2019 to 2021 should lead to slower but still positive real estate demand and absorption. Expectations for the real estate market are modest, and the sector is relatively well prepared for slower economic growth, if it occurs.

  • Deal Profile: Sun Crest Heights, Capitol Heights, Maryland

    This 44-unit residential rehab, financed by three mission-driven lenders, preserved workforce/affordable homes and reduced neighborhood crime—and meets nearly all its annual electric demand with on-site solar power.

  • U.S. Economic Growth to Continue; Europe Faces Problems, Says Bloomberg Economics Editor

    April 18, 2019

    The U.S. economy continues to perform strongly nearly a decade into the current recovery and China appears to be bouncing back from a slowdown, but weakness in Europe is a cause for concern, a prominent business journalist told an audience at the ULI Spring Meeting in Nashville. The U.S. GDP growth trend is still solid, said Kathleen Hays, global economics and policy editor for Bloomberg Television and Bloomberg Radio, who has covered the U.S. economy and the Federal Reserve for more than 30 years. “The bottom line is the economy is still growing and it’s still creating jobs,” Hays said.

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