Global economic uncertainty driving down capital flows worldwide
Global real estate consultant CBRE is reporting this week that rising global economic uncertainty has dampened commercial real estate capital flows both into and out of the U.S. in the first half of 2019.
With the longest global economic expansion on record, international investors face an increasingly complex calculus in identifying cost-effective opportunities for potential downturn protection, slowing cross-border capital flows. Inbound capital to the U.S. in H1 2019 was down by 48% from H1 2018 (about half of this decline was due to less M&A activity), and U.S. outflows were down by 18%.
However, capital from certain Middle Eastern countries increased despite the overall decline in cross-border investment.
The Inland Empire, East Bay and Boston are among the top U.S. markets still registering significant increases in global capital.
Sovereign wealth funds, insurance companies and pension funds (SWIP) together accounted for 30% of inbound volume in primary markets during H1 2019 compared with just 3% in secondary markets.
Freddie Mac's latest Primary Mortgage Market Survey is reporting this week that the 30-year fixed-rate mortgage in the U.S. was the lowest in three years. As rates fell for the third consecutive week, markets staged a rebound with increases in manufacturing and service sector activity.
According to Transwestern's latest office research report, Where WE Go From Here, a number of U.S. office markets could feel the impact of WeWork's 2019 setback as landlords wrestle with how to fill space in a cooling economic environment.
The National Association of Home Builders' latest 55+ Housing Market Index is reporting this week that U.S. builder confidence in the single-family 55+ housing market dropped four points to 68 in the fourth quarter of 2019.