Commercial Investment Real Estate May/June 2017 | Page 50

CCIM
CONNECTIONS
Core Investor
by Samuel S. Moon
mid the volatile backdrop of a new presidency, it is U.S.
core commercial real estate that offers great opportu-
nity for investment gains, income, and diversifi cation
for David Gilbert, president and chief investment offi -
cer for Clarion Partners.
“The primary reasons to invest are relatively high current
yields, appreciation potential, infl ation protection, low vola-
tility, and diversifi cation through a low correlation to stocks
and bonds,” Gilbert says. “It’s no
surprise that institutional investors
have been progressively increasing
their target allocation to real estate
now to over 10 percent in their
mixed asset portfolios.”
With U.S. Treasury bond yields
recently reaching a 17-month high
and expectations that the new Trump
Administration will cut taxes cou-
pled with increased infrastructure
spending, many investors are won-
David Gilbert,
dering whether this is the right time
president and chief
to sell off their real estate positions or
investment offi cer for
begin increasing them.
Clarion Partners
A
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May | June 2017
“The Trump pro-growth policy is a largely defi cit-funded
expansionary fi scal stimulus package,” Gilbert says. “The econ-
omy in both real GDP growth and job creation should benefi t
over the next three to four years, and I see higher demand for
commercial space based on current proposals from the Trump
administration.”
For international investors, U.S. core real estate offers attrac-
tive current yields and appreciation potential. Given many global
concerns such as a slowdown in China, Brexit, European Union
uncertainty, and emerging market volatility, the U.S. is still
considered a safe haven globally for both institutional and indi-
vidual investors.
“Currently, there are 1.3 million new households and 2.3 mil-
lion new jobs being created each year, suggesting strong demand
for commercial space,” Gilbert says. “After the energy industry
downturn over the past two years, U.S. corporate profi ts have
fully recovered and are on track to grow by 11 percent over the
next 12 months, thanks to new government initiatives .”
Moreover, U.S. consumers are in better shape today, with
household wealth at all-time highs and accelerating year-over-
year wage growth. Gilbert remains bullish to the core.
Samuel S. Moon is media relations manager at CCIM Institute.
COMMERCIAL INVESTMENT REAL ESTATE