CBRE Group, Inc. is the world’s largest commercial real estate services and investment firm, with 2017 revenues of $14.2 billion and more than 80,000 employees (excluding affiliate offices). CBRE has been included in the Fortune 500 since 2008, ranking #207 in 2018. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.


CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers with $105 billion in assets under management.

Built up over more than 40 years, our unparalleled platform is focused on real assets, giving our institutional clients access to real estate and infrastructure in the Americas, Europe and Asia Pacific. Our clients benefit from a complete range of investment solutions including equity and debt, direct and indirect, and listed and unlisted strategies.

Trammell Crow Company, founded in Dallas, Texas in 1948, is one of the nation’s oldest and most prolific developers of, and investors in, commercial real estate.The CBRE Global Investors and Trammell Crow Company platforms make up the Real Estate Investments division of CBRE Group.

The Real Estate Investments division is led by
Danny Queenan, Global CEO, Real Estate Investments.


Regularly released content on the state of the real estate and infrastructure industry are produced by our subject matter experts and shared on their blogs. A selection of them can be found below.

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Q1 2019

While cap rates remained relatively unchanged, the rise in corporate bond yields resulted in tighter relative pricing through 4Q18. Corporate bond yields rose by close to a full percentage point through the final months of 2018 in response to heightened stock market volatility. The cap-rate-to-corporate-bond ratio declined to 111.0. Despite the narrowing spread between cap rates and corporate bond yields, real estate remained “fairly” priced on a relative basis.

Sources: Oxford Economics, NCREIF, Green Street, Real Capital Analytics

Despite strong property market fundamentals, recent stock market and interest rate volatility weighed on listed sector returns, resulting in a -5.9% total return during the final quarter of 2018. While listed sector returns retracted, private real estate performance remained positive, producing a quarterly return of 1.4% in 4Q18. The return represented modest deceleration from recent quarters, largely fueled by the retail sector’s lackluster performance and diminished capital growth across all property sectors.

Sources: NCREIF; NAREIT. Both indices rebased to 100 on June 30, 2006

An indication of growing economic uncertainty and expectations for slower growth moving forward, the yield curve continued to flatten through the early part of 2019, as the 3-month/10-year Treasury spread contracted to 29 bps in January – the lowest level since midyear 2007. Since the Fed has indicated fewer rate hikes in 2019 than previously anticipated, the reduced upward pressure on the short-end of the curve should, ideally, stimulate growth and allow for a widening of the term spread.

Source: Federal Reserve

After 28 months of consecutive growth, the U.S. Leading Economic Indicators Index (LEI) declined modestly in December 2018, decreasing by 0.1% from the previous month to 111.7. The recent decline in stock prices, manufacturing orders, and building permits offset positive gains in other contributing indicators. Although up 4.3% year-over-year, the LEI’s recent decline may indicate a deceleration in economic growth in the coming quarters.

Source: The Conference Board Index is comprised of ten economic indicators, including average production work week, initial unemployment claims, manufacturers new orders, vendor performance, supplier deliveries, building permits, stock prices, money supply, consumer expectations, and interest rate spreads.

The unemployment rate is often acknowledged as a lagging indicator. However, the trend, and more specifically a trough, in the unemployment rate, has shown to be a leading indicator for an economic correction. After reaching a multi-decade low of 3.7% earlier in the year, the unemployment rate rose to 4.0% as of January 2019. While a single month-to-month increase is not necessarily alarming, a sustained rise in the unemployment rate relative to trend would raise red flags.

Source: BEA
Jeremiah Lee
Joey Valenzuela
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This information is for our clients and investors only. Please note that the content of this report is for informational purposes only and should not be viewed as investment advice or an offer or solicitation. Any opinions are solely those of the Strategy & Research Team of CBRE Global Investors and are subject to change without notice, and may not be consistent with market trends or future events. This research is based on current public information that we consider reliable, but we do not represent it as accurate, updated or complete, and it should not be relied on as such.

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