{"id":1004745293,"date":"2025-02-03T04:36:36","date_gmt":"2025-02-03T12:36:36","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004745293"},"modified":"2025-02-04T04:31:01","modified_gmt":"2025-02-04T12:31:01","slug":"what-defines-the-best-cre-investments-today","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/what-defines-the-best-cre-investments-today\/","title":{"rendered":"What Defines the Best CRE Investments Today?"},"content":{"rendered":"\n

Fluctuating interest rates<\/a>, evolving investment strategies and shifting demand across asset classes are prominent in today\u2019s commercial real estate landscape, according to Integra Realty Resources\u2019 latest annual trends report.<\/p>\n\n\n

\n
\"Anthony<\/a>
Anthony Graziano, CEO, Integra Realty Resources. Image courtesy of Integra Realty Resources<\/em><\/figcaption><\/figure><\/div>\n\n\n

In the Viewpoint 2025 <\/a>survey, IRR shared viewpoints from its nearly 600 valuation advisors across the U.S. and the Caribbean.<\/p>\n\n\n\n

\u201cIn this market, fundamental value isn\u2019t about speculation but real cash flow, strong locations and realistic tenant demand,\u201d Anthony Graziano, CEO of IRR, told Commercial Property Executive<\/em>.<\/p>\n\n\n\n

Investors need to rely less on the cost of money and more on effective management to maximize operations by focusing on sustainable rent levels and assets with lasting economic function, Graziano advised.<\/p>\n\n\n\n

\u201cLong-term value lies in markets with strong job growth, economic drivers and favorable migration trends,\u201d he said. \u201cFundamental value is not a definition\u2014it is a recognition that investors need to get back to basics and study fundamental drivers that create long-term value.\u201d<\/p>\n\n\n\n

In the meantime, private investors have shifted capital allocations to alternatives such as senior housing, self storage, build-to-rent single-family and data centers.<\/p>\n\n\n\n

Create a lasting impact<\/h2>\n\n\n\n

Graziano said the best real estate investments go beyond returns\u2014they create lasting impact.<\/p>\n\n\n\n

\u201cToday’s most successful projects are mixed-use developments that integrate housing, retail and community spaces, especially in high-growth metros,\u201d he said. \u201cDevelopers are embracing adaptive reuse, transforming vacant malls, offices and hotels into vibrant mixed-income housing and health-care facilities, addressing market demand and community needs.\u201d<\/p>\n\n\n\n

Graziano pointed out that projects such as Nashville Yards<\/a> and Richmond\u2019s Diamond District showcase this transformation, seamlessly blending commercial space with housing, entertainment and public gathering areas.<\/p>\n\n\n\n

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READ ALSO<\/strong>: Which Asset Classes Stole the Spotlight in 2024?<\/a><\/p>\n\n\n\n

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Additionally, four developers are proposing a redevelopment of Boca Raton City Center in Boca Raton, Fla., incorporating these principles.<\/p>\n\n\n\n

\u201cThese developments demonstrate that reimagining underutilized spaces isn\u2019t just good urban planning; it\u2019s a blueprint for sustainable, community-driven growth,\u201d he added.<\/p>\n\n\n\n

Trump policy points to \u2018America\u2019 first<\/h2>\n\n\n\n

As an over-arching theme, national economic policy action can have impacts (intended and unintended) on the economy, which nearly always affects the direction of real estate values, Graziano said.<\/p>\n\n\n\n

\u201cPresident Trump\u2019s general thesis has always been clear: America First, which will generally be good for real estate and real estate investment in growth. He\u2019s an expansionary president who focuses on investing in America\u2019s economic strength, and disinvesting in activities that do not tie to American growth.\u201d<\/p>\n\n\n\n

The challenge on the real estate front will be balancing the America First growth focus with potential dislocations associated with abandoning prior administration policy, Graziano warned. Some examples include stated reductions in the federal workforce through DOGE, cuts to major programs that could have industry-specific impacts and significant divestiture of federal assets (land, buildings, leases, etc.).<\/p>\n\n\n\n

Office determinant on federal workers<\/h2>\n\n\n\n

For the first time in years, Graziano said he is seeing a real policy push that could bring federal workers back to the office.<\/p>\n\n\n\n

\n\n\n\n

READ ALSO<\/strong>: Trump\u2019s Gift to the Office Market<\/a><\/p>\n\n\n\n

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\u201cIf private employers follow the lead, it could finally stabilize the sector, especially for well-located Class A buildings,\u201d he said. \u201cNot every office building will make a comeback. Older Class B and C buildings continue to face an uphill battle, and many must be repurposed to stay viable. This is especially true of aging government buildings.\u201d<\/p>\n\n\n\n

Industrial shifts to domestic<\/h2>\n\n\n\n

Graziano said industrial remains the strongest asset class, but after years of rapid expansion, it\u2019s shifting into a more measured growth phase.<\/p>\n\n\n\n

He added there\u2019s been a shift toward domestic production following the post-Covid reshoring trends.<\/p>\n\n\n\n

\u201cAs President Trump implements the threatened tariffs and provides reshoring incentives, the industrial sector could see another wave of demand\u2014especially in border states and major logistics hubs,\u201d he said.<\/p>\n\n\n\n

Labor shortages and high development costs remain real barriers, Graziano cautioned. Even with strong demand, constructing the next generation of industrial facilities won\u2019t be easy or cheap, he anticipates. Port cities could see a fall-off in container throughput as imports directly correlate with port industrial demand.<\/p>\n\n\n\n

Retail relies on confidence<\/h2>\n\n\n\n

Retail\u2019s success is tied to consumer confidence.<\/p>\n\n\n\n

\u201cIf President Trump\u2019s tax policies put more money in people\u2019s pockets, we could see a boost in spending\u2014especially in restaurants, entertainment and service-based retail,\u201d according to Graziano. \u201cBut there\u2019s a flip side: if trade policies make imports more expensive, big-box stores and fast fashion retailers could take a hit if there is a consumer backlash on pricing.\u201d<\/p>\n\n\n\n

Graziano anticipates that this will also appear in the inflation stats, which could impact the Fed funds\u2019 rate policy. \u201cExpect strong performance from grocery-anchored centers and necessity-driven retail, which tend to weather economic volatility better than most.\u201d<\/p>\n\n\n\n

Multifamily remains steady<\/h2>\n\n\n\n

Multifamily has been one of the steadiest asset classes, but policy shifts could shake things up, according to Graziano.<\/p>\n\n\n\n

\u201cMultifamily is stabilizing, though affordability concerns are keeping investors cautious,\u201d he said. “Some pockets of multifamily distress have been building in markets with high inventory deliveries.”<\/p>\n\n\n\n

If President Trump extends tax cuts or eases regulations, more investment could flow into new development, Graziano anticipated. <\/p>\n\n\n\n

But immigration policies and potential rent controls in some states could impact demand and operating costs. According to Graziano, housing is also a significant component of inflation statistics, so there will be competing interests to keep rent and housing growth strong, but not too strong, which will undermine inflation protections. \u201cInvestors must stay flexible and focus on markets with strong job growth and steady population gains to mitigate risks,\u201d Graziano cautioned.<\/p>\n","protected":false},"excerpt":{"rendered":"

And how new policies could affect asset performance, according to Integra Realty Resources\u2019 latest report. <\/p>\n","protected":false},"author":3568,"featured_media":1004732631,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21748,21783,23891,21742,21747,37749,21749,51037],"tags":[34748],"class_list":["post-1004745293","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-industrial","category-investment","category-national","category-latest","category-office","category-research-center-cpe","category-retail","category-trends","tag-integra-realty-resources-inc"],"acf":[],"yoast_head":"\nWhat Defines the Best CRE Investments Today? - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Evolving investment strategies and shifting demand across asset classes are prominent, according to Integra Realty Resources\u2019 trends report.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/what-defines-the-best-cre-investments-today\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Defines the Best CRE Investments Today?\" \/>\n<meta property=\"og:description\" content=\"Evolving investment strategies and shifting demand across asset classes are prominent, according to Integra Realty Resources\u2019 trends report.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/what-defines-the-best-cre-investments-today\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-02-03T12:36:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-04T12:31:01+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/10\/Anthony-M.-Graziano-Chief-Executive-Officer-Integra-Realty-Resources.png\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Richard Berger\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-defines-the-best-cre-investments-today\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/what-defines-the-best-cre-investments-today\/\",\"name\":\"What Defines the Best CRE Investments Today? 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