The world’s wealthiest individuals keep getting richer. That bodes well for commercial real estate, which continues to hold a place in the allocation strategy for high-net-worth and ultra-high-net-worth individuals and family offices.
Global high-net-worth investor wealth is projected to nearly triple in size from 2006 to 2025 to surpass $100 trillion by 2025, according to data from Capgemini. The population of high-net-worth investors grew 4.9 percent in 2015, the most recent year for which data is available, while their wealth grew 4.0 percent.
Capgemini’s World Wealth Report 2016, meanwhile, found that real estate and construction ranked as the fifth highest sector among sectors expected to drive wealth growth through 2015.
Exclusive research from NREI’s survey on high-net-worth investors (HNWI) shows that these investors still hold real estate in high regard, although reaching them, educating them about the intricacies of investing in the sector and meeting their sometimes aggressive return expectations all pose challenges for commercial real estate pros.
The NREI research report on the high-net-worth investment in commercial real estate was conducted via an online survey distributed to NREI readers in November. The survey results are based on responses from 400 participants. Of the total survey respondents, 30 percent identified themselves as private real estate investors, 24 percent said they were in leasing and/or investment sales, 20 percent identified as building owners/managers and 21 percent identified as building owners/developers. In addition, 55 percent said they were owner/partner/president/chairman/CEO or CFO-level executives.