Commercial Real Estate Outlook: Q4 2019
Top Papers on the Outlook for Global Real Estate
In the last three months we have witnessed a profound shift in the direction of global monetary policy. What impact does this have on the outlook for CRE returns? The fact that central banks believe looser policy is needed should make investors a little wary about the demand side of the equation, but asset allocators might naturally be inclined to believe that lower bond yields justify lower yields on prime property.
Below we list some of the best commentary from the last couple of months, examining the outlook for commercial real estate markets, both globally and regionally. We also include some key papers which discuss the properties of real estate as an asset class and provide insight to the structural changes that are occurring.

FEATURED PAPER
New U.S. Tax Law Promotes Investment in Opportunity Zones (Aegon AM, Aug 2019)
Recent legislation was introduced in the U.S. to encourage investment in areas deemed as 'Opportunity Zones' by offering a tax incentive for investors. Aegon looks at the relative attractiveness of investing in apartment complexes located within opportunity zones, as well as the process of identifying and investing in them.
GLOBAL REAL ESTATE OUTLOOK
Global Real Estate Summary (UBS AM, Aug 2019)
Both a weaker global growth outlook (largely due to political uncertainty and trade wars) and a recent dovish shift in monetary policy from central banks will affect real estate investors. UBS Asset Management discusses these and other factors influencing the outlook for global real estate.
How Will Real Estate Debt Perform in the Next Downturn? (PGIM Real Estate, 2019)
Given the rising interest in real estate debt allocations, this interview with experts from PGIM Real Estate discusses the risk/return profile of the asset class and how it may perform during the next economic downturn.
Lower rates: boon or bane for real estate? (Nuveen blog, Aug 2019)
Nuveen examines the outlook for real estate markets given the backdrop of lower interest rates.
COUNTRIES AND SECTORS
U.S. CRE Market Insights (Aegon AM, Sep 2019)
Aegon discusses the outlook for US CRE investment returns.
U.S. commercial real estate outlook (Manulife IM, Sep 2019)
For compliance reasons, this paper is only accessible in the EMEA region
This article discusses recent US economic data and its implications for the US commercial real estate market.
UK Real Estate Outlook: Brexit uncertainty deters investors (UBS AM, Aug 2019)
UBS Asset Management presents their outlook for UK real estate in the second half of the year. Uncertainty over Brexit may still be deterring investors.
Retail concerns growing across the Eurozone, 2H19 (UBS AM)
UBS updates their property return forecasts for the eurozone. Despite the weakening outlook for the eurozone economy, return expectations for the property sector have improved, largely due to dovish monetary policy.
Future transformation of grocery-anchored real estate (Nuveen blog, 2019)
Grocery stores face pressure from e-commerce solutions, a shrinking middle class, and advancements in in-store technology. The authors look at the transformation of grocers over the next decade.
CMBS Update: A Healthy Outlook (Aegon AM, Aug 2019)
The authors believe that the asset class of commercial mortgage-backed securities (CMBS) remains attractive, despite the existence of volatility and uncertainty in the broader market.
SECULAR TRENDS IN REAL ESTATE
The changing face of real estate portfolios (MSCI blog, Aug 2019)
MSCI discusses diversification within real estate portfolios. Institutional investors are diversifying their exposures and investing in other property types such as data centers and logistics centers.
Structural Megatrends in Real Estate: Engaging the Future (Nuveen, 2019)
This collaborative report contains thoughts on megatrends in real estate. What are the main drivers of the structural changes that are happening, and how will they continue to shape the future of the real estate industry?
PROPERTIES OF REAL ESTATE
Allocating to Real Assets (Mercer, 2019)
This paper provides ideas on the characteristics that can be delivered by real assets and how they can be incorporated into an investment strategy.
Commercial Real Estate as an Asset Class (2018)
This academic paper discusses the properties of commercial real estate (CRE) as an asset class.
Real estate may be yielding less than you thought (MSCI blog, Sep 2019)
Capital expenditures can erode the yields of real estate assets. How can investors account for capex and improve their understanding of the income profile of their portfolios?