Real Estate Retail in Rockford IL is a Profitable Investment
The high probability of more interest
rate increases by the Federal Reserve, and other developments—ranging from
geopolitical uncertainty, U.S. political gridlock and U.S.-China trade friction
to sliding stock market performance—that made headlines during the recently
holiday season are continuing to do so this year in real estate retail inRockford IL.
The Potential Market in Real Estate
Retail in Rockford IL
With so many sources of potential market
volatility threatening investors, U.S. real estate remains a relatively safe
asset where investors can protect their capital and receive risk-adjusted
returns across different market conditions. Foreign investors, especially, will
continue to invest in U.S. real estate to avoid currency and market risk.
Despite the pullback in Chinese and Russian investments in U.S. real estate due
to pressures from their respective governments, investors from Canada, European
Union members such as Italy and Spain, the Middle East and other international
markets are still eager to buy into U.S. real estate projects.
Sovereign wealth funds for national
governments around the world still demonstrate interest in real estate retailin Rockford IL, so foreign investment dollars will continue to flow into
commercial, multifamily, multi-use and other real estate projects this year. As
of the end of the second quarter, more than 60 percent of sovereign wealth
funds invested in real estate, according to Preqin data, and all sovereign
wealth funds with at least $100 billion in assets under management invested in
the asset class. Furthermore, 68 percent of sovereign wealth funds invest in
private real estate funds, according to Preqin, and of the sovereign wealth
funds that invest in real estate, 68 percent of them are targeting North
America for investments.
Investing into Real Estate Retail inRockford IL
Institutional investors, including
pension funds, will also continue to look for investment opportunities in U.S.
real estate this year—and in retail real estate in particular. Among the
institutional investors active in real estate which were surveyed by Preqin in
the second quarter of this year, 69 percent expressed a preference for retail
real estate in North America. Of those institutional investors, 26 percent were
public pension funds and 28 percent were private sector pension funds.
Furthermore, the number of closed-end private real estate funds concentrating
on retail investments reached a record high in April 2018, with 183 funds
targeting $67 billion in committed capital, according to Preqin.
However, the interest in retail-specific
real estate among investors doesn’t necessarily portend positive performance
for all retail real estate properties in the coming year. E-commerce has been a
tremendous economic disruptor across the country, causing many stores selling
items or services that can be purchased online to suffer. Department stores, as
well as sporting goods, hobby, book and music stores, experienced negative year-over-year
retail sales as of the second quarter of 2018, according to the U.S. Census
Bureau and CBRE Research, which also reported that the second quarter was the
ninth consecutive quarter in which non-store retailers were the leaders in
revenue growth.
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