"It is encouraging to learn that despite the current turmoil in the overall financial markets, investor appetite for commercial real estate continues to grow," observed Michael E. Pralle, President and Chief Operating Officer of J.E. Robert Companies. "JER has been through volatile cycles before and we understand how to operate in both good times and bad. Investor confidence in the commercial real estate sector is in line with our forward-looking perspective overall."
Other important finding indicates that senior management, overall performance and history/reputation are most important attributes investors consider when selecting a particular commercial real estate investment firm. Of the survey respondents, 45% indicated that senior management is the most important criteria in selecting an investing partner, followed by performance at 34% and history/reputation at 17%.
Transparency, regular communication, and longevity of the firm's principals are also key drivers for investors, with 90% citing transparency, 82% naming regular communications, and 82% noting longevity as important when considering a real estate investment firm.
"Communication and transparency are critical to the investment community, especially during a volatile time like we are experiencing now," noted Clyde Robinson, Director, Global Capital Markets & Client Relations at JER Partners. "Keeping investors up-to-date, monitoring and sharing information on assets, geographies and trends has always been a top priority at JER. Our investors appreciate the honest and timely communication and thorough information."
"We provide regular detailed analyses of all of our funds and the investments in each, and schedule quarterly calls to ensure investors have the information they need and the opportunity to ask questions of the folks managing their investments," continued Robinson. "In terms of the longevity of the firm and its principals, JER's leadership team averages 19 years of experience in sourcing, underwriting and managing real estate equity investments, and our founder is actively involved in the major decisions of the firm - as he has been for the past 27 years."
The survey found that private equity is the most attractive form for investing in commercial real estate, followed by REITs and direct investments. Forty-eight percent of the investors surveyed invested between $10-$500 million in private equity investing in commercial real estate over the past year, compared with 33% invested in REITs and 33% through direct investments.
Commented Pralle, "Investors recognize the value of investing with a private equity firm, as it is most effective to partner with a company that has the infrastructure and expertise already in place. JER is a good example of this. We have local experts in every market we invest in, we understand real estate on every level, and we believe that we have the asset management experience necessary to add value."
