How is commercial real estate changing due to economic factors? Check out the most-read CRE news stories from February to keep track of macro trends.
Capital Markets
February 8, 2023 Luck And Guts Might Not Be Enough To Ride This Real Estate Cycle
Some CRE investors have had luck with buying New York assets during the recession in the late 2000’s and selling them for a higher price. They are now exploring buying opportunities in the region. However, though they may look to the previous recession as an indicator for what could happen, they may experience more unpredictability this time around.
Due to economic uncertainty, CRE investors in the U.S. have been looking into debt to gain more lucrative returns.
New research by Green Street found that CRE prices are dropping from their highest point in the previous year following the hike in interest rates.
Economy
While some may believe that CRE is in a recession, it may be too early to say for certain and it may depend on whether CRE meets the criteria typically used to identify a recession.
Office
Owen Thomas, CEO of BXP, said that CRE is in a recession due to layoffs, reductions in spaces and growth not being as fast as typical.
January 31, 2023 Office Occupancy Hits New Milestone As Employers Regain Leverage
With the economy in a downturn, employers have been gaining the upper hand in the office market, with many enacting plans for bringing workers back into the physical office.
Multifamily
February 17, 2023 Financial Modeling With Untrended Rents Protects The Bottom Line. But At What Cost?
So that lenders can forecast the value of their asset, developers are asked to provide in their pro forma how much rent increase they anticipate for their building project.