Sector challenges remain for US commercial real estate in the near term
We expect the intensifying headwinds from higher interest rates, tightening lending standards, and weakening economic conditions to result in a near-term pricing correction and reduced returns for US commercial real estate.
What you will learn:
- Office returns are expected to record the steepest declines in 2023. For the second year in a row, we are projecting total returns in the office sector will be the lowest among the main property types.
- While we expect returns to rebound over the latter forecast years, capital growth will be sluggish, with downside risks adding further uncertainty to our forecast.
- There are several risks to our baseline forecast, particularly tighter credit conditions and an asset price crash.
Tags:
Related Resources
Post
Demographics are set to propel niche property types in the UK
As the UK population ages, time-use data suggest that the property sectors with structural tailwinds will be those that provide space for activities related to home entertainment, eating and drinking, socialising, events, leisure, hobbies, and sports/exercise.
Find Out More
Post
Amid disruption, what can US office learn from retail?
We examined the disruption of generative AI at the US county level. We identified several metros – Atlanta, Denver, New York, San Francisco, and Washington DC – that had at least one county with the highest percent of displaced workers from AI.
Find Out More
Post
Global Private equity real estate fund maturities spur asset sales
We expect the significant increases in fund maturities, spurred by capital raised over the past decade, to exert upward pressure on the rate of asset disposals as the funds approach the end of their lifecycles.
Find Out More