CBRE Group Inc (CBG): Riding High on Real Estate Growth

The U.S. real estate market is back on track as is evident from the recent increase in prices and rentals. CBRE Group Inc (NYSE:CBG) has been one of the big beneficiary of the growth in the real estate sector over past few quarters, the company’s stock is up  over 44% in last one year. Bob Sulentic, President & CEO of CBRE Group Inc (NYSE:CBG) discussed the recent developments happening in real estate markets and the lucrative areas for real estate investments on CNBC, recently.

CBRE Group Inc (NYSE:CBG)

“Rental rates are going up, occupancies are going up. There is not a lot of new development going on in the commercial sector so offices, industrial, retail. So, what you are seeing is a good environment for investing in real estate and investors are doing well, developers are doing well,” Sulentic said.

Sulentic revealed that the Big Boxes as a market is doing very well, owing to the development in e-commerce space. A majority of e-commerce players are now focusing on same day and next day delivery, which requires them to set up these Big Boxes near metropolitan areas. Consumers benefit from the instant delivery model and so does companies like CBRE Group Inc (NYSE:CBG), which deploy these big boxes for e-commerce companies to execute the instant delivery model. Sulentic mentioned that there has been 16 straight quarters of growth in the occupancies of big industrial boxes and their rents are going up too.

Sulentic believes that a lot of growth in commercial real estate in U.S. in the recent times can be attributed to the capital flows from international investors in the commercial real estate sector in the secondary and tertiary markets of U.S. He feels the reason for that is, there is a lot of capital internationally that is being deployed in U.S. as investors are liking the dynamics in the U.S. commercial real estate market, the improvements in fundamentals, real estate providing a hedge for inflation and interest rates being low.

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