How investors feel about committing capital amid a pandemic

Covid-19’s economic disruption was swift and punishing, but it has not derailed institutional capital’s hunger for real estate.

In fact, according to a pair of informal surveys that gathered input from a total of more than 170 investors, many are optimistic about a speedy return to business as usual and eager to commit capital to strategies that will capitalize on freshly minted opportunities.

“On balance, the sentiment was more optimistic than I thought it would be,” Susan Swanezy, a partner at New York-based Hodes Weill and Associates, said of the findings from conversations with more than 100 investors and consultants. For example, “When asked questions about disruption to investment plans, over 50 percent did not anticipate disruption beyond three months.”

The investor perspectives corralled by Hodes Weill were not gathered through a scientific survey, Swanezy notes, but rather by asking clients the same group of questions, primarily over the course of routine business calls. Still, some prevailing opinions became clear, she said, including that real estate is more attractive given the current market conditions.

“Unlike other downturns, when excess supply has been a factor, real estate was not a contributor to this correction,” Swanezy said. “It’s certainly impacted by the pandemic but it’s not a cause and that is relevant for the outlook as well. Investors tend to focus on the strategies that can generate some income during difficult times and real estate can do that.”

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